Moving home - what is paid when?

firsttimemover

This may seem like a really stupid question, but I just wantto make sure I’m clear on something before we start planning our move, andbefore I overpay more into my mortgage then find out I need it in savings tomove!

I currently own a property (bought as a first time buyer, sothis is my first home move) and am looking to move to a bigger property nextyear. We have a healthy deposit made up primarily of equity built up in ourcurrent property as well as savings. Reading about the selling/buying process,it appears that deposit has to be paid on exchange, not completion, so myquestion is, is it at exchange that your current mortgage ends and new onebegins, and the equity in the property is withdrawn for the new mortgage, eventhough we might not move until a few weeks after this? Or is a differentdeposit/holding fee required at exchange and full deposit transferred oncompletion?

I know that obviously it all has to work out as people useequity to buy their new property, but I’m currently overpaying on my mortgageand want to make sure that we have enough “cash” to finance the move as well asequity.

With that in mind, could someone also tell me what chargeswhen moving need to be paid up front before the move (such as surveys) andwhich can be paid after the move?

Thanks in advance.

pinkteapot

Your existing mortgage will run until completion, and your new one will start then too*.

On exchange, you pay a deposit, typically 10% of the value of the house you're buying. You'll receive a 10% deposit for the house you're selling from your buyer. You can use that to pay your deposit, topping it up as required. E.g. if you sell for £150k and buy for £200k, you'll receive a £15k deposit and have to pay £20k, so you'll have to 'top up' by £5k from your own savings.

If you don't have this available, your solicitor can ask your seller if they're willing to accept a smaller deposit.

*To be precise, your new mortgage will usually start 1-2 days before completion, as your solicitor will ask your lender to release the funds to them so that they arrive in time for completion day.

firsttimemover

Thank you! I'm really glad I asked then, rather than continuing to plough our savings into the mortgage! The home we are hoping to buy will be significantly more than our current property, so could be quite a lot of shortfall!

firsttimemover

If anyone else can help out with what needs to be budgeted for BEFORE completion, that would be great, thanks.

pinkteapot

As soon as your offer is accepted, you'll have to pay for:

1. Mortgage application fee (varies by product from £0-£2k).
2. Survey fee (depending on what level of survey you have and house value, £300-£1k).
3. Solicitor money on account (to pay for searches) - ours is £250.

Then, on exchange, you'll need to pay the deposit shortfall.

I *think* that's it until completion. Your solicitor will send a completion statement and prior to completion (maybe up to a week beforehand) you'll need to send him/her:

1. Rest of their fee.
2. Stamp duty.

You'll also pay your EA fee for selling your house on completion - I can't remember but I think this might be paid via the solicitor too.

firsttimemover

thank you