Selling/buying same time advice

Branchini1979

Hi guys,

Going to sound stupid here but have only bought before and now wanting to move to bigger home so first time selling.
Basically we have about £32000 deposit saved and been told can have approx 190k mortgage. So this is approx £220k budget.
A lot of houses we are looking at are around the £240-250k mark so we are about £20k short but in our current house we have £110k mortgage left and valued at £185 so that means we would be able to do it but my question is how can we unlock some of that potential £75k to be able to afford the £250k houses we are looking at?
Sorry if this sounds silly but any advice is most appreciated.

Lee

AnotherJoe

The money is unlocked when you buy and sell simultaneously. This is why so many people end up in chains* its the only practical way of doing it, most people are in the same boat, the equity in their current house effectively gets transferred to their next one.

In your case, lets say house you are buying is £250k, £75k equity in house you are selling, you need £175k, deduct say £25k from your £32k (leaving some aside for expenses etc) and you only need a mortgage of £150k.

* Person A buys from B buys from C buys from D etc.

eddddy

Most people sell and buy at the same time (literally on the same day).

So you can put the £75k 'excess' from your current house towards the purchase of your new house.

Estate Agents, Solicitors and Mortgage Lenders are all geared up to handle this. If you just say that you are selling and buying at the same time, they will know exactly what you mean.

Maybe just talk it through with a mortgage adviser, to make sure you can get the loan you expect, and to make sure you've done your sums correctly.

Chanes

I wouldn't buy and sell at the same time again. I would sell, rent and take some time to buy. I know most do both at once but it is so stressful!

Anyways, speak to you mortgage people for advice and your exact purchasing power. And good luck with it!

da_rule

Look at it this way, on the day you sell your property (which will, by the sounds of it, also be the same day you buy another property) you will have the following:

£32,000 - Deposit (you may have already paid some/all of this as the deposit on exchange of contracts)
£75,000 - Equity from current house (price you sell your house for minus outstanding mortgage)
£190,000 - Mortgage

Therefore you will have £297,000. Out of this you will obviously need to pay the purchase price of the new house, legal fees (buying & selling), stamp duty, moving costs (this will probably need to come out of the £32k), etc.

AnotherJoe

Chanes wrote: »

I wouldn't buy and sell at the same time again. I would sell, rent and take some time to buy. I know most do both at once but it is so stressful!
!

Why would that be less stressful?
You'll likely still be in a chain when you sell, just a shorter one.
You'll have to find a rental and move into it. You'll be there for six months minimum or spend a lot extra on rent. You'll have to align your rental start date with your sale unless you spend extra on rent. There may not be a good rental that this coincides with.
When you buy, you'll still be In a chain, just a shorter one, unless you buy a new build (which brings its own stress)
You'll have the stress of aligning the end of your rental period with moving date unless you are happy to pay an extra month or two of rental.
You'll have the hassle of being in a rental. Anything goes wrong you can't just fix it when you want.
You'll go through all the legalities twice, plus the checks needed for rental.
The legalities will cost more.
If house prices are rising then you'll have the stress of seeing your equity decrease in relative value and be pressured into buying quicker than you might want.