Selling 1st home &buying second, do I need 10% deposit again?

Jimbo29

We currently have a mortgage for which we paid ten percentage deposit on, as first time buyers. We have just sold this property and looking to buy our second, my question is can we just borrow more on out existing mortgage without having to have another big deposit? Or do we have to go through process of finding another deposit again?
Thanks

KRB2725

The deposit goes up the chain. So the deposit paid by the purchasers of your current house will form the deposit for the house you are intending to buy. If this amount falls short of the 10% deposit then you just have to pay the balance (unless a smaller deposit has been agreed I believe).

SG27

I read it as the deposit for the mortgage rather than the deposit you pay to the vendor on exchange.


Your deposit for your next property will be made up from equity in your current property. How much is the mortgage and what is that sale price?

Jimbo29

Yes for the mortgage. So I sold my house for £114,000 (that's with £12k equity available ) so that's what I will be using for next house.

My question is now I am looking at a house for £180,000. Do I need to find 10% again? (18k) or can i get a mortgage where I can just use the 12k equity. It's just I don't want to ask my parents if I can help it :undecided

*also stupid question but if I sell my house and live with my parents for a few months while I look for my second property, am I then off the property ladder*

Contemptuous

Mortgages are available with a 5% deposit, the rates just aren't as favourable.

Mrs_Rachel_Trelfa

If you only have £12k to put into a house costing £180,000 then that is only equity of 6.66% so you be looking at rates for a 95% ltv mortgage. Plus you will need money for fees etc.

gazfocus

Don't forget that out of that £12K, you have to pay solicitors fees and estate agent fees for the sale of your existing house, then you will need your deposit for your new house plus solicitor fees/survey fees/removal costs/etc for your new house.

Chances are, out of £12k equity, you might be lucky to be left with £8k to use as a deposit on your new house.

Red-Squirrel_2

I'm sorry if this sounds rude, but I think you might need to put the brakes on the sale of your existing property while you do some research and figure out if you can actually afford to move. You don't really seem to understand he process yet, and could end up in a real mess.