A naiive Question: Where do you get the deposit when moving house?

Robin81

Hi All,

Please forgive my ignorance on this one but I've always wondered...

when you decide you want/need to move onto a new home from your existing mortgaged home...where does the deposit come from???

When we were first time buyers we saved up for the deposit 5-10% of the propoerty value and there were also options of 100%+mortgages at the time for this too (though not anymore of course). But when you make an offer on a new and usually more expensive propoerty where on earth do most people get their deposit from?

I'm guessing a proportion could come from the amount the buyers of your current home have put up but does the rest just get added to your new mortgage (in which case difficult to pay in advance) or is it a case of saving again for a few years in anticipation of buying somewhere new?


Sorry for being a dunce but I've never really been around this growing up so not come across it.:o

~Beanie~

Well as an example, if your current home sells for 200K and you owe 150K on the mortgage, the 50K left over would be your deposit on your next place. If the new house required a bigger deposit, then savings would need to be used to make up the difference.

Thrugelmir

You'll need to find typically 10% of the purchase price in cash to exchange contracts. Now that house prices have risen so high this is an issue for many people. As their only real equity is tied up in the house. So arranging short term finance secured against the existing property can be done but is expensive.

So ideally you need to build up a longer term savings pot over time for a multitude of reasons, not just moving house.

dkmax_2

Robin81 wrote: »

where does the deposit come from???

That depends on what you mean by "deposit".

roonaldo

savings! thats why the rental market is so boyant.