Newbie question about selling of house

Heisenberg87_2

When selling your property I am getting myself confused about what happens to the profit made. For example;

Buy a property for £190,000
Borrow £171,000
Interest rate of 4.38%
4 years later I now owe £154,543 on the mortgage.

If I sell the property (4 years) at £195,000 does that mean I recoup £40,457?

jamei305

When you sell the house you pay off the remaining mortgage plus any fees like agent, solicitor and any early redemption charge there might be on the mortgage. What is left over is cash for you. Where else did you think the profit went?

Heisenberg87_2

jamei305 wrote: »

When you sell the house you pay off the remaining mortgage plus any fees like agent, solicitor and any early redemption charge there might be on the mortgage. What is left over is cash for you. Where else did you think the profit went?

Didn't word the question brilliantly. It was more do those sums add up and if anyone had past experience with how much the east agent would get in fee's?

lincroft1710

After the mortgage had been paid, you would receive £40,457

BUT

You had already put down a deposit of £19,000, solicitors and estate agents fees, say £5,000, then add together all the mortgage payments you have made, plus any early mortgage redemption fees, your net gain is a lot, lot less.

AdrianC

Heisenberg87 wrote: »

If I sell the property (4 years) at £195,000 does that mean I recoup £40,457?

Yes, you have £40k equity in the place - the value less the outstanding mortgage.

But that's not £40k profit. As has been said, you had a £19k deposit, so that's £21k "profit". From that, to get your profit, remove the sale costs, the purchase costs from four years ago, and the costs of ownership in the meantime. Profit is what you have left.