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Need money from equity for a deposit
tillylou
Posts: 15 Forumite
Hi all,
We currently have a flat on a help to buy mortgage and we are looking to move into a house, also using the help to buy scheme. In the two years since buying our flat, we have gained about £110k in equity (after 20% deduction for equity loan and paying off the mortgage), however we only have around £17k saved and would need £27k for a deposit on exchange on the new property.
We would only be putting around £80k of the equity down as a deposit (this is more than 5% of the £525k property value) but our issue is that we don't have the funds up front.
I am hoping that someone can suggest a way around this so that we can find the extra 10k for the deposit on exchange, because without it it looks like we will end up missing out on the new property. We have asked family but nobody has the funds to lend at the moment, and it is obviously something we can pay back in full as soon as our sale completes, but we are concerned that taking out a loan would be a bad move with a pending mortgage application.
Thanks in advance for any suggestions!
We currently have a flat on a help to buy mortgage and we are looking to move into a house, also using the help to buy scheme. In the two years since buying our flat, we have gained about £110k in equity (after 20% deduction for equity loan and paying off the mortgage), however we only have around £17k saved and would need £27k for a deposit on exchange on the new property.
We would only be putting around £80k of the equity down as a deposit (this is more than 5% of the £525k property value) but our issue is that we don't have the funds up front.
I am hoping that someone can suggest a way around this so that we can find the extra 10k for the deposit on exchange, because without it it looks like we will end up missing out on the new property. We have asked family but nobody has the funds to lend at the moment, and it is obviously something we can pay back in full as soon as our sale completes, but we are concerned that taking out a loan would be a bad move with a pending mortgage application.
Thanks in advance for any suggestions!
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Comments
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That's some increase in house value in 2 years. Can't you sell?
Remember you'll have to pay extra Stamp Duty if you already have a property and it'll be substantial on a property of £525k - 32k the calculator I've used is correct. I take it you've got money for other fees.0 -
Sorry, maybe I didn't explain that properly. We are selling our current place to buy the new place, but I need the deposit money on exchange and won't have it until we complete. And I know!! Massive increase, we bought for £217k and are hoping to sell for £330k. London madness.0
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ask the bank for a bridging loan. Or anyone with a spare £80k :-)0
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What is a bridging loan, and would I be best to go to the bank I have my current account with or the bank I have my current mortgage with? We only need 10K. We have 17.5k and only need to put a 5% deposit on exchange, which works out at £27.5k. We will put the rest at a later stage to make it up to 80k.0
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no need for any loan, perfectly normal to use equity in property your selling to fund next purchase. Just complete on same day and solicitor sorts it out.Mr Generous - Landlord for more than 10 years. Generous? - Possibly but sarcastic more likely.0
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I wish it was this simple but because the property is a new build, we will be buying off plan so completion won't be for a few months after exchange - they require exchange within 28 days!0
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I know what you are talking about OP. Sometimes your solicitor can get the seller to accept a 5% deposit on exchange ( rather than 10% ) and that agreement often trundles up the chain. RStuck on the carousel in Disneyland's Fantasyland
I live under a bridge in England
Been a member for ten years.
Retired in 2015 ( ill health ) Actuary for legal services.0
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