What next??

captain1000

Hi,my fixed term mortgage deal expires in september. I'm now considering moving house but how does it work? Do I sell mine,pay off the mortgage then apply for a new mortgage with a deposit???

go_cat

You could or you could do it as one transaction - sell house / buy house using any equity as deposit for new house.

If using the same mortgage company is your mortgage portable or are you going to try new lender?

Don't forget all the fees you will need - stampy duty EA fees, solicitors, new mortgage application fee if applicable etc

captain1000

Does it matter how much deposit I would have for the new house? So if I have £10k equity for example,will that hinder me getting a bigger mortgage with the same lender??

kingstreet

captain1000 wrote: »

Does it matter how much deposit I would have for the new house? So if I have £10k equity for example,will that hinder me getting a bigger mortgage with the same lender??

It will if the lender requires a 10% deposit and your £10k is less than 10%.

You sell your property and on completion day the money is received by your solicitor. He pays off the existing mortgage and whatever is left over (with any cash addition you wish to put in) becomes your deposit for the next purchase. He receives the mortgage money for the new property, adds it to the deposit he's holding and pays it over to the vendor's solicitor for the property you're buying. Normally the selling fees come out of the equity too, so don't forget them.

Whether you go back to your existing lender or find a new one, you still have to meet the deposit and affordability criteria. Equity from your current home, cash, or a mixture of both, the deposit must hit or exceed the chosen lender's minimum requirement.