We've seen a house we love - what to do first? Make offer/visit bank/secure sale?

PrincessJR

Hi,

My Husband and I are expecting our first child and looking to move to a bigger house. We have seen a perfect house in a perfect location currently up for offers around £215,000.
Our current home is worth £160,000 and we have a potential buyer - family member - our mortgage balance is £140,000 (so we will have £20k deposit).

Should we visit the bank first to make sure we can borrow enough? or should we make the owners an offer and establish how much they would be willing to sell to us for?

We're not sure which thing we should do first, as our current home is our first some we were first time buyers with no home to sell!

Thanks in advance for any help x

Rockaway_BabyDoll

Find out how much you can borrow first. It's not fair to the seller if you make an offer that's accepted and then have to pull out, even if just a week later.

Remember, you don't necessarily have to stay with the same lender, though that depends on the current deal you have etc. It's worth speaking to a whole of market broker.

hethmar

I hope it all goes well Dont forget you will have expenses other than just the deposit though.

G_M

PrincessJR wrote: »

Hi,


Should we visit the bank first to make sure we can borrow enough? or should we make the owners an offer and establish how much they would be willing to sell to us for?

What is the point of offering to buy a property with money you may not have?

Avoid 'the bank' who will only offer their own products - see an independant mortgage (or financial) advisor who can review ALL the mortgages available.

_Andy_

PrincessJR wrote: »

Hi,

My Husband and I are expecting our first child and looking to move to a bigger house. We have seen a perfect house in a perfect location currently up for offers around £215,000.
Our current home is worth £160,000 and we have a potential buyer - family member - our mortgage balance is £140,000 (so we will have £20k deposit).

Should we visit the bank first to make sure we can borrow enough? or should we make the owners an offer and establish how much they would be willing to sell to us for?

We're not sure which thing we should do first, as our current home is our first some we were first time buyers with no home to sell!

Thanks in advance for any help x

You won't have a £20k deposit as you haven't factored in estate agents fee, legal fees, valuation etc.

In terms of how much you an borrow, what are your gross annual incomes?

pinkshoes

Assuming you just have the £20k and no other savings, then you'll need £1000 for a solicitor, and other moving cost of say £1000. This means you only have £18k deposit, and given you need a 10% deposit, then the maximum price for a house would be £180k...

Definitely go and see a mortgage advisor first, and remember that what they offer as a mortgage in principal is not always what they'll actually give you! The amount often drops, which has happened to many people I know!

Yorkie1

pinkshoes wrote: »

Assuming you just have the £20k and no other savings, then you'll need £1000 for a solicitor, and other moving cost of say £1000. This means you only have £18k deposit, and given you need a 10% deposit, then the maximum price for a house would be £180k...

Definitely go and see a mortgage advisor first, and remember that what they offer as a mortgage in principal is not always what they'll actually give you! The amount often drops, which has happened to many people I know!

You'll need to deduct the stamp duty on the new purchase from your available funds too.

Thermidor

Yorkie1 wrote: »

You'll need to deduct the stamp duty on the new purchase from your available funds too.

Is there stamp duty on a property of just £215k? I thought not....

G_M

Thermidor wrote: »

Is there stamp duty on a property of just £215k? I thought not....

Over £125,000 to £250,000 = 1%

PrincessJR

Thanks for your responses so far, very helpful. We do have a small savings pot of around £3000 which we have set aside for stamp duty, solicitors etc.

mrsp80

PrincessJR wrote: »

Should we visit the bank first to make sure we can borrow enough? or should we make the owners an offer and establish how much they would be willing to sell to us for?

We're not sure which thing we should do first, as our current home is our first some we were first time buyers with no home to sell!

When you make an offer the vendor's estate agent will probably ask you to come in to validate the offer by going through your finances (most have in-house brokers).

That consultation is free, and although you will certainly want to go away and do your own research (and ensure the broker is whole-of-the-market and doesn't charge for the service), it will at least make you aware of what you can obtain mortgage-wise.

You could even do this before you make the offer - it can be easier than getting an appointment at the bank.

Or you could get an Agreement in Principle from a mortgage lender, which just shows how much they may lend you (obviously nothing is set in stone until you get the full mortgage offer though).