Buying a 2nd house

premiumz

Hi,

My family and I are looking to move house next year. We currently own the house we are living in. It's the first house we have owned and so we have never moved from owning a house to another house we would like to own.

How does it work when buying the new house? Would we need to sell the house we are in first and use those funds against the new house as a deposit? Or do we need to buy the new house as if we were purchasing a new property from scratch and have additional funds for the deposit?

If we do need additional funds for a deposit for the new house, what happens once we have sold our old house? Assuming we would have had to get a second mortgage already before the sale of our house was made in order to buy the new house. Does that mean the funds from the sale of our house would not actually be added to the new house because we had to make the purchase separately with the additional deposit?

Sorry if that's confusing. I'm trying to explain it as best I can!

Many thanks

movilogo

How does it work when buying the new house? Would we need to sell the house we are in first and use those funds against the new house as a deposit? Or do we need to buy the new house as if we were purchasing a new property from scratch and have additional funds for the deposit?

Do you have deposit to pay for 2nd house? If yes, you don't need to sell your 1st house. But you will need to convert it to BTL mortgage if you want to let it out.

If you do not have enough deposit for 2nd house, you have 2 options.

Option 1: Sell 1st house
Option 2: If you have HIGH equity in 1st house, you can borrow more against it and then use that amount as your deposit in 2nd house.

If you go option 2, then best to speak with mortgage advisor as it involves 2 mortgages (this is known as let to buy).

PS: Don't forget to make provision for higher stamp duty for 2nd house.

premiumz

Hi,

Thanks for the response.

If we were selling our first house while buying the second house with a deposit we saved. Would we then need to pay the higher stamp duty for the second house? In this instance, would it be best to first sell the house and then purchase the new house so we pay the standard stamp duty?

We do have a deposit saved for the next house. We have also thought about holding onto our current house but are unsure if we need the money to help fund the next house. (DIY)

Many thanks

movilogo

You do not pay higher stamp duty if you sell your primary residence to buy new primary residence. In fact, you can buy 2nd house (paying higher duty) and if within 3 years you sell your 1st house, you can claim the extra stamp duty back.

premiumz

Okay, great thank you.

If I did want to try and stretch things so that I owned 2 properties. Is it easier to get a second mortgage or harder?
Would they see it as more financial risk or because I have a property already they could use that as collateral?

Many thanks