Moving house - with good equity but debts to consolidate

matstaffs

We want to move from current home worth 110k (only 15k left to pay off) to a property worth 220k.  We don’t have savings, house move costs 5-10k and we have 1k Credit card outstanding.  What is the best way for us to go about this, can we as part of the move release 10k equity of current property to cover costs or do we get a separate loan to cover the move but this gives us a mortgage and loan yo pay which is less preferred.  We have some recommended mortgage brokers from friends but some peoples feedback here would be helpful in preparation.

thank you in advance

foxy-stoat

So you currently have £95,000 equity and want to buy a £220,000 house.
You need a mortgage of £135,000 or there abouts and use the balance to pay for the move.

lees80

You would keep money back from the equity during the move - this would pay your debts. Brokers will be able to advise further, but that is the most basic way of doing it. 
110k - 15k = 95k
95k (surplus funds after existing mortgage settled) - 20k = 75k (approx move costs + debt)
75k remaining as deposit on your next house, leaving a mortgage of approx £145k.

You could keep more money back depending on affordability etc. A good broker will be able to guide you through. 

franklee

foxy-stoat said:

So you currently have £95,000 equity and want to buy a £220,000 house.
You need a mortgage of £135,000 or there abouts and use the balance to pay for the move.

Bearing in mind the house sale money only becomes available on completion I would add  matstaffs should watch out for costs that need to be paid before completion day.  matstaffs, you need to know exactly when in the process everything becomes due.

You would need a vendor who is happy with just your buyer's deposit as that's normally done at exchange of contracts. Rather than your having to top the amount up as the house you are buying is worth double the amount of the one you are selling and the deposit may be a percentage of the value.

Also when in the process will mortgage arrangement fees, surveyor etc. need paying?

matstaffs

Thank you for the very quick responses it seems good that a loan isn’t needed.  We will start making a list of fees likely yo need paying and at what point they will be due.  Most likely use purple bricks as agent as thats who the house we are interested in has been listed with and they are pay on completion, removals is covered as less than 1 mile and have access to vans so need to educate myself on things like surveying, epcs and solicitor fees.

hazyjo

matstaffs said:

Thank you for the very quick responses it seems good that a loan isn’t needed.  We will start making a list of fees likely yo need paying and at what point they will be due.  Most likely use purple bricks as agent as thats who the house we are interested in has been listed with and they are pay on completion, removals is covered as less than 1 mile and have access to vans so need to educate myself on things like surveying, epcs and solicitor fees.

Search the forum for Purple Bricks as advice is generally to use a bricks and mortar EA. All (well, certainly the vast majority!) EAs are paid at the end, not in advance.

lees80

You can only pay on completion with Purple Bricks if you use their conveyancing solicitors. 

yksi

I would not even bother to go and view a house listed with Purple Bricks and many buyers feel the same. Just so that you know.

eddddy

matstaffs said:

We want to move from current home worth 110k (only 15k left to pay off) to a property worth 220k.  We don’t have savings, house move costs 5-10k and we have 1k Credit card outstanding.  What is the best way for us to go about this, can we as part of the move release 10k equity of current property to cover costs or do we get a separate loan to cover the move but this gives us a mortgage and loan yo pay which is less preferred.  We have some recommended mortgage brokers from friends but some peoples feedback here would be helpful in preparation.

Purely based on what you say here, it might be worth taking a step back.

It sounds like you currently have a 'smaller' mortgage, but you don't have enough 'spare' monthly income to pay your credit card off or accumulate any savings.

Now you want to take out a 'bigger' mortgage, presumably with higher monthly payments. If you have no 'spare' monthly income with your current monthly mortgage payments, how will you afford the higher monthly mortgage payments?