Basic question: how do i move

Tumtitums

i bought a flat a few years ago however i want to move to a freehold house . My flat has gone up in value i think by about 25% (based on current asking prices online) since i bought it. If i move 3 miles further out i can buy a house which would cost the equivalent of the current selling price of my flat . I cant afford a house in my current location

How do i do this . Are there any websites of guidance ? I am thinking i could sell the flat and use this money to buy a house but really dont want to sell the flat until i have bought a house.

Xyzzy

Hi Tumtitums, i assume you have a mortgage currently? First of all you will want to get an agreement in principle to ensure you can get a mortgage for the amount you need- just because you have a mortgage currently it doesnt mean that you'll necessarily get a new mortgage on the new property. You'll need to workout how much equity you have in your current property and whether you need to hold any back for stamp duty, estate agents etc. You'll then want to put your property on the market and get your offer accepted on the one you want to buy. Then once you've had your mortgage offer you can arrange to exchange, usually people set a completion date for sale & purchase on the same date- I hope this helps

Lemonsqueezer78

Do you have the necessary cash available to buy a house outright without selling your flat first?

Or do you have the cash available put down a deposit for a new house - and then sufficient income to be accepted for a mortgage on the rest of the cost of your new house - without selling your flat first?

If the answer to these questions in "No" then you will need to do what many have to do which is to embark on a simultaneous sale (or your flat) and purchase (of your new house) which will allow you to take all the proceeds from your flat and move them over to enable you to buy a house. All of those transactions (your sale - and your puchase) can happen in one go.

Firstly, speak to a few estate agents and ask them to come and provide valuations for your flat - as you will need to establish how much you can realistically sell it for - as your flat sale price, minus your current remaining mortgage, minus all your other costs will tell you what you have left to put down on your new house.

Then speak to a mortgage broker to determine what your mortgage options are for your new house - they can help you calculate what you will have available from the proceeds of your flat sale - and what you might be able to borrow to cover the rest of the cost of buying your new house, if you need them to - and then they can help you find a mortgage lender that can help you.

Before you apply for a mortgage on a new house, you first need to find a buyer for your flat - so go back to the estate agent you most liked (and/or gave you the best deal) and get them to market your flat - conduct viewings and hopefully, obtain offers from prospective buyers.

Once you have a buyer (or you feel confident you will find one quickly) you can start looking for a new house. But be aware, if you start looking for a house before you have a buyer lined up for your flat, you may not be able to make offers on a new house. Estate Agents will be reluctant to take offers from someone who is not yet in a position to start the purchase process.

But once you have a credible offer from someone to buy your flat - and once you have found a house in your budget and you have made an offer, which has been accepted - you start the simultaneous process of selling your flat and buying your house.

Your mortgage broker - once you have found a house to buy - can start the full mortgage application process for you to secure a mortgage on your new house.

To complete your sale and purchase you will also need to enlist a solicitor to carry out all the legal work involved in selling and buying properties. I won't go in to detail here (search/google "conveyancing for property sales and purchases").

Once you have a mortgage offer in place (your lender will conduct a valuation of your new house to confirm they are happy that your new house is suitable security for your requested mortgage) and once your solicitor has completed all the work they have to in regards to your sale transaction AND your purchase transaction - and one all the other people in your chain have done the same thing - everyone will be ready to exchange contracts and agree a single "completion date" which is the day when everyone sales AND purchases will all take place at the same time - and all the money from your flat sale (minus costs and paying off your previous mortgage) will be moved over to your new house.

Tumtitums

Thanks so basically you are saying to buy the new one and sell the current one at the same time ? This sounds like a logistical nightmare. What if either the buying or the selling process takes longer than the other ? What is the disadvantage of buying the new property before selling the current one. In the back of my mind is the fact that the economy and therefore house values can change quite rapidly

In terms of mortgages my income has decreased as i work less hours so i assume the bank will offer me less of a loan. I am going to try to see if can increase my hours (and therefore annual salary) so hopefully the bank will offer me more but im thinking they will need to see a few months of payslips with the new salary

Lemonsqueezer78

The fact is, it can be a nightmare to sell a house and buy another at the same time. And don't forget; the person buying your flat might also be trying to sell their previous property at the same time too - and the owners of the house you want to buy may also be wanting to buy a new house at the same time too (this is called a chain - and the number of people in a chain of sales and purchases can be high!). But it is what millions of people have to do every year.

If you simply cannot afford to buy a new property without selling your current property first - then you have no choice.

As you seem very inexperienced (no offence) - speak to a mortgage broker asap to discuss mortgage options with them, including information on what you might be able to borrow - or if need be, what you need to do to get ready to apply for a mortgage. If your salary is not stable, or you are increasing it using "overtime" which might not actually be guaranteed (in your employment contract) lenders may not accept all of that money in their affordability calculations.

You need professional guidance on this.

Xyzzy

The disadvantage of buying the new house before selling the current one is that you'll need a separate deposit- savings for example, to put down on the new house. You won't have the equity from your flat until after you've sold it. You also would need to be able to afford the monthly payments for both mortgages. Yes, there are complications with buying and selling simultaneously, that's why many house sales fall through, because of the chain of people trying to buy and sell on the same day.

Regarding your income, what type of contract are you on? If it is zero hours you would usually need to evidence your income to 12 months payslips. If you do overtime you'll usually need to show 3 months. If you dont want to borrow any more or increase your loan to value try approaching your current lender firstly, they may be able to give your application special consideration if your aren't increasing your borrowing

Tumtitums

when i went through this in my head , if the cost of the new property is the same as the price i sell the current property for then there should be no difference in the amount i owe my current lender

I need to think about this chain idea a bit as i can see how it would be offputting for the seller of my new property and anyone wanting to buy my current one

AnotherJoe

Tumtitums wrote: »

Thanks so basically you are saying to buy the new one and sell the current one at the same time ? This sounds like a logistical nightmare. What if either the buying or the selling process takes longer than the other ? What is the disadvantage of buying the new property before selling the current one. In the back of my mind is the fact that the economy and therefore house values can change quite rapidly

Not that quickly but that's why people end up in "chains" (I presume you've heard that phrase) Person A buys from person B buys from Person C and so on al buying selling on the same day organised by the solicitors.

I think there's a section in here on the house buying process, there are books you can buy (just be sure to get a UK focussed one) and also I STRONGLY sugegst you engage a mortgage broker to guide you though the process.

Tumtitums wrote: »

What is the disadvantage of buying the new property before selling the current one.

The main disadvantage will be, you cant do it since you cant afford to own two houses

Tumtitums wrote: »

In terms of mortgages my income has decreased as i work less hours so i assume the bank will offer me less of a loan. I am going to try to see if can increase my hours (and therefore annual salary) so hopefully the bank will offer me more but im thinking they will need to see a few months of payslips with the new salary

Yes, they will.

AnotherJoe

Tumtitums wrote: »

I need to think about this chain idea a bit as i can see how it would be offputting for the seller of my new property and anyone wanting to buy my current one

LOL its absolutely standard !!! Its what most people do simply as there is no option in most cases. Anyway even if you decided to sell first,(you'd then have to move out) and move out you could still be in a chain because the person buying your place may be selling one.

Then when you went to live somewhere else for a while (where would that be?) and then bought again, you will still likely be in a chain because you'll be buying a house from someone who is buying a house from someone and so on.

So all you'd accomplish is twice the hassle and about 1.5x the cost. Fuggadaboudit

Tumtitums

hmm theres a few Kirsty Allsop programs on the channel 4 website about chains so i will watch them though im seeing that sellers prefer people who arent in a chain but if the estate agents are open to this then i guess this is the most sensible option

Doshwaster

Tumtitums wrote: »

when i went through this in my head , if the cost of the new property is the same as the price i sell the current property for then there should be no difference in the amount i owe my current lender

You need to check your current mortgage deal. If you are in a fixed rate period then there will be a penalty for paying off the mortgage early (a "early repayment charge"). The lender may allow you to port the mortgage onto another property but you would have to talk to them about that.

So even if the property prices are the same you would still have to factor in the costs of estate agent fees, solicitor fees, any mortgage fees, moving costs and any stamp duty to decide whether it is worth it. I would say you would be looking at spending £5-10k just to move.

Tumtitums wrote: »

I need to think about this chain idea a bit as i can see how it would be offputting for the seller of my new property and anyone wanting to buy my current one

Yes, chains are an absolute pain but unless you want to restrict your market to people at either end then they are unavoidable. My next door neighbour took over a year to sell their house as their chain collapsed twice. It's even worse when it is caused by someone two or three steps removed from you so that you don't even know who they are.