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How does second rung on ladder work?
Sellotape
Posts: 6 Forumite
Hi
Sorry if this seems naive, but we're wondering exactly how the second step on the property ladder works.
I need to start by saying I live in London, which does not have the falling or stagnant house prices seen elsewhere. In fact, we're worried that we might never be able to afford our second place because of low supply, high demand and spiralling prices.
We have a mortgage at a rate of 3.9%, and still owe £225k.
We believe our current place has increased in value by £40k.
We also have a lump sum of cash of around £50k.
Our joint income is £73k.
How would we buy a more family sized home, which we'd like to do in 2-4 years? And what would you do with the £50k lump sum?
Cheers
Sorry if this seems naive, but we're wondering exactly how the second step on the property ladder works.
I need to start by saying I live in London, which does not have the falling or stagnant house prices seen elsewhere. In fact, we're worried that we might never be able to afford our second place because of low supply, high demand and spiralling prices.
We have a mortgage at a rate of 3.9%, and still owe £225k.
We believe our current place has increased in value by £40k.
We also have a lump sum of cash of around £50k.
Our joint income is £73k.
How would we buy a more family sized home, which we'd like to do in 2-4 years? And what would you do with the £50k lump sum?
Cheers
0
Comments
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You establish what you can afford for your new purchase.
You market and find a buyer for your current home.
You find and agree a price for a new property.
You apply for a mortgage and go through the usual checks. You have a whole new mortgage for the new property and the old one is repaid on the sale of your current home.
You may be able to port the rate from the old mortgage to the new one, if you stay with your existing lender for the new mortgage and the terms are portable.
The sale and purchase are usually completed on the same day.
You need to decide what you want to do with your £50k.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »You establish what you can afford for your new purchase.
Does that mean go and see a Mortgage Advisor first before anything else (as the OP might ask) ?Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
You can use online calculators to establish if the amount you need is feasible, before you go to the effort of trying to find a broker.!!!!!!_here wrote: »Does that mean go and see a Mortgage Advisor first before anything else (as the OP might ask) ?
Sometimes, you'd like to answer "see a good whole market broker" and leave it at that, but that is not considered an acceptable answer on here, so you end up waffling on about stuff that may not apply and end up with the "see a broker" at the end.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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