Profit when we sell . ... questions, questions . .

westy_1981

Hi all

I have a few questions regarding our mortgage if we sell - We bought in 2011 for £190k(very good deal) on an 85:15 LTV, we finished our first 2 year mortgage deal and had the place revalued by the next lender at £215k thus a more favourable LTV.
We are currently considering our options and selling may be one of them - next door sold recently for £230k (similar size and spec).
My questions are these;

If we sell for £225k for instance, giving us £35k profit would that all be ours or would we owe tax etc? If so how much?

If we sold and moved to rented would we have to pay a fee to pay off our mortgage early as the 2 year fixed isn't due to end until Nov 2015.

We are looking at relocating as well - we have very little accessible £££ in accounts etc (approx £1500) - with removals, fees etc etc we will need more, but it is tied into the equity we have in the house - what's the best way ahead.

Apologies for all of the (sometimes vague) questions but any advice would be very gratefully received.

Yorkie1

Assuming you live in the property, or have done so recently (I think within the last 18 months) then there will be no tax to pay at all.

If you sold before the end of a fixed rate period, the early repayment fee would be added on to what you owe the mortgage company before the balance is sent to you. So, in your example, if the fee for early repayment is £2K, you'd get £33K back from your solicitor.

Don't forget to deduct the EA's fees and solicitor's fees from the sale proceeds, too.

Given the costs in selling and moving, unless this really is a priority and things have changed significantly since last November when you remortgaged, then I'd consider staying put.

If you want to buy a new place at the same time as selling your present one, there is usually a possibility of porting the deal across to the new property. You apply to your present lender for a new mortgage on the new property and if you pass affordability tests then you can keep your present interest rate on the balance outstanding on your present mortgage, and have a new interest rate on any increased borrowing.

hcb42

If you want to relocate, or even move, I would boost those savings, that is very tight to pay out everything you need to prior to exchange/completion.

BTW do you still owe 85% of the £190K ? Two years in? The amount for the new property must be higher now, assuming the mortgage OS has reduced

Thrugelmir

When do expect to relocate? As that seems key to any decisions you make.