selling and then buying a property

Tumtitums

Hello The following sounds too good to be true am i missing something



I have a flat which i will sell for £200000


I still owe the bank £125000 for the mortgage for this flat



there is a house i want to buy for £300000


Can i carry over the £125000 to the new house property and the £200000 from the flat sale meaning that i would be left with £25000 after buying the house



Or am i missing something ?


The above hasn't happened yet so im just thinking in theory :A

chunkytfg

Huh?

You have 200k - 125k = 75k equity in the flat.

When you buy it you carry the 75k over to the new house and then mortgage for another 225k.

Carrot007

No you are a bit late for a 108 1/3 % mortgage.


And even then I think I would like 25k would not have been a reasonable reason.

robatwork

They walk among us.

chunkytfg

robatwork wrote: »

They walk among us.

:rotfl::rotfl:

eddddy

Your calculation will be something like this:

• Sell current flat for £200k
• Pay off mortgage at £125k
• Pay selling/buying costs - say £10k

So you're left with £65k in cash.

• Add in your savings £???
• Ask a mortgage broker how much you can borrow on a mortgage £???

Add up: Your savings + what you can borrow on a mortgage + £65k to get your max purchase price.

As an example, if you have no savings and you take out another £125k mortgage...

... You will be able to afford a property costing up to £190k.

saajan_12

Tumtitums wrote: »

Hello The following sounds too good to be true am i missing something

I have a flat which i will sell for £200000 - okay, so you'll net ~£195k after selling costs. If you haven't lived there for most of the time you owned it then likely less as you'll also have to pay cgt.

I still owe the bank £125000 for the mortgage for this flat - okay, so after paying off the mortgage you'll have £70k. The lender won't let you sell without either settling the mortgage balance or porting the liability to another property which they are happy with as security.

there is a house i want to buy for £300000

Can i carry over the £125000 to the new house property and the £200000 from the flat sale meaning that i would be left with £25000 after buying the house - you have £200k from the flat sale IF the lender agrees to reassign the £125k LIABILITY to the new property. This isn't additional money you have, but rather part of the £200k which you have to pay back now or later.

You'd have £200k sale proceeds and need to borrow another £110k for the new 300k house and fees. Total mortgage will be the £125k ported over + £110k second mortgage = £235k. This is only if the lender agrees to port and you pass affordability for £235k.



Or am i missing something ?


The above hasn't happened yet so im just thinking in theory :A

Currently you have a +£200k house and -£125k from mortgage liability. The 125k is not extra money making the total 325k, but rather its the part of the 200k that isn't yours. If you port the £125k mortgage, its just a paper change that the liability changes to the new house.. its not extra cash you'll receive.

Might be easier to think of it without the porting ie you have £200k - £125k = £75k equity. That's your money for costs (say 10k) and deposit (say 65k) on your new property meaning you need to borrow £235k TOTAL on the new property.. you can split that between the original lender and a new lender, or pay off the exisiting mortgage entirely and get a new one.. either way the total borrowing is the same.

foxy-stoat

Tumtitums wrote: »

Or am i missing something ?

The above hasn't happened yet so im just thinking in theory :A

Yes you have completely missed the point - good lucks