Selling and Buying - Advice!

kingstreet

It sounds like you'll just about have enough for a 10% deposit if you sell for the £115k you think it's worth, after fees/costs.

I don't know what this article says about adding stamp duty to a mortgage, but at 90%, you aren't going to have such an option. You might get a lender which allows you to add its arrangement fee, but that will be about it.

I decided to read the article and it seems to miss one major point. If you are at the maximum LTV for the lender, you can't add anything, even if you wanted to...!

Atomix

Just re-read the article / my advice...

yeah, Once you find out the maximum you can lend, you will obviously know where you stand with regards to 'adding-on' stamp duty - and how much you'll have to play with, when buying your next house...

Cissi

I think that with such small savings (apart from the equity in the house) you may have a cash flow problem at exchange. Typically, you pay a 10% deposit at exchange, which would come to £22,000 if you purchase a house for £220,000. If you sell yours for £115,000 then you'd get £11,500 towards this from your buyer, but you'd still need to find the remaining £10,500, and this can't come from the mortgage. I think your solicitor can negotiate something with everyone further up the chain, but you need to be aware of this. I'm not exactly sure how this would work as we've never been in this situation.

fragmast3r

surely he would have 26k towards deposit etc? 115k - 89k = 26k left?

Cissi

fragmast3r wrote: »

surely he would have 26k towards deposit etc? 115k - 89k = 26k left?

Not at exchange because his buyer will also only put down a 10% deposit, ie £11,500. I think you're confusing the mortgage deposit with the contract deposit...

For clarification: the mortgage funds are only released at completion, and the full purchasing amount is only paid at this point. Normally 10% of the purchasing value is paid at exchange, and even if the two happen on the same day you need to raise this sum first - unless the solicitors have agreed otherwise with the entire chain.

fragmast3r

lol, you are right just been through the process...... forgotten already

matt1987

Ah right ok, this has made me look at things differently. I've got no chance in saving up £10,000! How will this process be carried out then? Obviously I would have to make it known beforehand?

By the time we move we'd have around 3-3.5k in chash.

Alternatively, if its going to be a major problem, I could sell the house first, move in with family and be a buyer without a house to sell?

Another edit - I've never really heard of this before, and neither has my family who have purchased houses without any cash deposit. Is this a new thing? Does it make any difference if then house I was purchasing had no upward chain?

Matt

Bargie

interested to know about the deposit. We are currently moving from our FTB home to the next size up and all our equity is in the house to fund the deposit for the next buy. Surely this is quite common - how do you do the deposit for exchange? Luckily we would be able to borrow from family if necessary and pay back out of sale but would rather not.

With regards to your other questions, our solicitor fees (all searches, sale, purchase, and SD selling a house at £125k and buying for £165k have been quoted at about £3500.

matt1987

I've got the fees through for selling my property and buying a property worth £220,000.

All in all it comes to £4100. This includes stamp duty of £2200 and ll relevant searches.

Does this sound reasonable?

Also, I did bring up the potential cash flow problem and was told that it wouldn't be an issue?

Matt