Advice on funds to pay buying fees

Se99paj

Hello, I'm looking for some advice, I bought a 1 bedroom flat about 5 years ago, I have £100k left on the mortgage and the property should be worth £210k (maybe more).

My girlfriend and I are looking to move to a bigger property, we will be able to afford the increased mortgage/bills, but we're struggling with funds to pay the buying fees (legal/stamp duty).

Would it be possible to use some of the £110k from my property I'm selling to pay for these fees? Obviously this would reduce my deposit but I'm happy to do that.

Lemonsqueezer78

Yes. You can use some of your current equity to cover things like stamp duty and EA fees. Stamp Duty and EA fees are often paid once the sale/purchase has gone through so can be paid out of any "proceeds" from your sale. The stamp duty will normally be paid by you solicitor. Legal fees can be covered to, but obviously only those that you are not required to pay up-front. Obviously this all depends on what you do end up getting for your current place...

Work out how much you will be budgeting for your next property and how much of a deposit you need to put down (ensure you can still meet affortability and LTV requirements with a lower deposit)

The difference between the equity you have from your current property sale - and your next deposit is generally what you will be left with - and then your costs can come out of that.

Person_one

As above, most of the bigger costs can come from the sale proceeds, EA fees, solicitor fees, stamp duty etc. and mortgage application fees can be added onto the mortgage.

There are a few things that will need to be paid upfront though, search fees to the solicitor, valuation/survey fees, if you're selling a leasehold flat you'll have extra costs because you'll need to pay the management company and freeholder to provide the information needed for the sale and they can charge hundreds. I'd try to save a cash buffer of 1-2K to cover those plus anything unexpected that might crop up.

MerrilyA

Yes you can but as Lemonsqueezer78 suggested it'll only work for fees that do not need to be paid immediately otherwise you'd need to wait to sell before you buy.

It'll be a good idea to get your property valued by an agent to get a better idea of the price of your flat. Then you can work out your costs.

dc197

Crunch the numbers in a spreadsheet. Using equity to pay fees is fine but as you say it will reduce your deposit. This may mean you miss out on a loan-to-value bracket and don't get the best interest rate.
You can add some fees, such as mortgage fee, to the mortgage. But be careful because you'll pay 25 etc years of interest on that.