Second House Purchase Question - What can I afford

BeckyBoo91

Hi

I bought a house in December for £150,000

It was valued at £175,000 last week.

If I was to sell it and get £175,000 for it what house can I afford. Does this mean I hypothetically have gained £25,000 + by £15,000 deposit back in December. So do I have '£40,000' floating to use as my next deposit? So hypothetically afford a house worth £200,000

Or does it simply mean I can now afford a house which is £175,000?

kingstreet

You have the sale price, less the outstanding mortgage, less any cost/fees. This is your residual equity, or your deposit, if you like.

You will add this to the amount of mortgage you can obtain and the two figures added together equal the purchase price of your next property.

foxy-stoat

Less stamp duty and buying fees of course.

dimbo61

What have you done to your property to add £25,000 to the value in 6 months ?
Buying and selling costs, mortgage fees, survey, moving costs must all be taken into account.

GoingOn30

Presumably you've had it valued by an estate agent, and it's in their interest to value it high so you choose them to sell your property.

You won't know the value of the property until it is for sale and you get a proceedable offer.

BeckyBoo91

I understand the above - but what I am asking is what house price MAXIMUM can I afford based on my house now being worth £175,000?

BeckyBoo91

Flooring, new bathroom and painted the walls.

I understand the above - but what I am asking is what house price MAXIMUM can I afford based on my house now being worth £175,000?

kingstreet

Answered in post 2.

You have the sale price, less the outstanding mortgage, less any cost/fees. This is your residual equity, or your deposit, if you like.

You will add this to the amount of mortgage you can obtain and the two figures added together equal the purchase price of your next property.

... and stop shouting.