Advice please: looking to sell home & buy

almost

Please can anyone give me a little advice for my sanity! (I am going to book a meeting with a financial advisor in the next few weeks - I just need some info to tide me over till then).

I currently have a mortgage on a flat and I would like to sell it and buy a house. My current mortgage balance is £143,000. I believe my flat is valued at between £180,000 and £200,000. I have about £6000 in savings. I earn £40,000 p/a. I have no debt aside from my student loan.

Before I get over excited looking at properties, I want to understand what I could afford in principal so I set my expectations accordingly. Can anyone give me any initial guide as to what I could go for? EG would a house costing £250,000 be too much for me to stretch to?

Thank you!

sharp910sh

So you have £47k equity based in £190k house value.

You can borrow upto a maximum of 5 x salary, therefore you can borrow £200k.

With your deposit you can buy a house £200k+£47k+£6k(savings) = £253k.

It will depend on how much the bank will lend you. If they lend you £4.5 the amount reduces to £233k.

almost

sharp910sh wrote: »

So you have £47k equity based in £190k house value.

You can borrow upto a maximum of 5 x salary, therefore you can borrow £200k.

With your deposit you can buy a house £200k+£47k+£6k(savings) = £253k.

It will depend on how much the bank will lend you. If they lend you £4.5 the amount reduces to £233k.

Ahh, thank you so much - I think I've confused myself trying to read too many different guides to buying/selling! I had a gut feel £250,000 was towards the upper end of what I could go for, so for the time being while I am browsing Zoopla I'll cap it at £230,000 to leave myself some breathing room! :T

Clutterfree

You'll also need to keep some savings for moving costs, stamp duty, EA and solictitors fees, etc.

almost

Clutterfree wrote: »

You'll also need to keep some savings for moving costs, stamp duty, EA and solictitors fees, etc.

Yes - its a good point - I know these costs can be a surprise if I don't stay on top of them!

Samsonite1

almost wrote: »

Yes - its a good point - I know these costs can be a surprise if I don't stay on top of them!

Give yourself a buffer to cover the various costs including stamp duty. Your savings may just about do it as your stamp duty is likely to be just over £2k. If selling through an agent, their fee is likely to be slightly more than the stamp duty. Add in your solicitors costs and a removals company and I reckon you may need more than £6k. I would probably hold back £10k at least. There may be other costs that pop up too.

martindow

Before you see the advisor I would get a few estate agents round to get an estimate of your flat's value. There is no point seeking advice if your idea of what you would get after selling is wrong (higher or lower than your figures).

MortgageMamma

On first glance £230 seems a more realistic estimate of what you can afford, but you need a full affordability assessment before anyone could really say. An affordability assessment takes into account all your expenditure and to some extent lifestyle to work out a realistic budget for you new mortgage payments.


Before you start viewing


1. Get 3 valuations on your flat. Plump for an average of the 3 figures. Read up on estate agency contracts as there are some iffy terms in some of them and you want to be free to move away from the estate agent if they don't perform well.
2. Once you know the asking price for your property, work out what is the lowest offer you would be prepared to accept.
3. Go to/telephone a broker. Get them to do your affordability assessment assuming the LEAST amount of equity you would accept from the sale of your flat. Once this has been done ask for a "decision in principle or brokers letter" to take on viewings with you. Some estate agents like to be able to see proof of ability to get mortgage before they commit to viewings. A brokers letter is better than a decision in principle as a decision in principle will say what your max lending amount is and the agent will see it and know what you can go up to when you make an offer to buy a property.


Good luck with your move/purchase.

MM

ElsieMonkey

Remember to also not be caught out by unexpected costs of selling a leasehold flat. We're selling ours at the moment and paid £350 to the managing agents for a 'sellers pack' to be sent to the buyers solicitor. And are also paying £420 to the freeholders solicitor to do the 'license to assign'. The phrase daylight robbery springs to mind, but there's not a lot you can do about it unfortunately...

We saved ourselves money by using online estate agent eMoov, and they have been amazing. Have a read of the reviews on Trustpilot website. We've saved ourselves almost 5k by not going with a high street EA and in return have received a far superior service and selling experience.

Good luck x

sam3103

In agreement with ElsieMonkey here, we sold a leasehold flat and had to pay £250 for a selling pack and another £250 was paid for our solicitors to hold until the start of next year to cover any costs that arise for the maintenance over the part of this year that we owned the property. We will get any unused monies paid back to us.