Can I afford to move?

splitenders

Hi, so quick bit of backstory. Last year I bought a small studio flat in London. It was a big cost due to the area and it used all my savings I'd been putting away for years. Now my circumstances have changed, I've recently found out I'm pregnant. My place isn't really suitable for a baby, and I'd like to move out of London to be closer to my family. The price of a house is the same as what my flat is up for. The problem is I now have no savings, and I haven't been here long enough to build up any equity to use as a deposit on another place. Is there any way I'll be able to move, or am I stuck here for a while?
Sorry if this is in the wrong place, it's all abit new to me!

Bossypants

As you'd be selling in order to buy at approximately the same value, the deposit would be 'passed along' down the chain, i.e. you effectively use your buyers' deposit to give to your vendors.

That said, there will be other costs involved, most obviously stamp duty on your purchase (since you're no longer a first time buyer), legal fees for both your sale and purchase, and estate agent fees on your sale. You might also want a survey on the purchase, some kind of help to move (be it van rental or a bells-and-whistles removal firm), and to do at least a basic amount of redecoration on your new place. 

Then there's the other practical stuff: Are you working, and if so can you do your job from your new location? What's the maternity leave money situation going to be like? If you'll be needing a mortgage (even to port the existing one) all of this will be of interest to the lender.

blue_max_3

If there is no equity, it may be that you are 'underwater'. That is to say, you owe more than the current value of the property (in light of the current market). You'd have to make sure you moved into the new property at the same time, or you may have to find that shortfall. But if you can clear the mortgage, can you move in with family for a short time? That might give you some breathing space as it's horribly stressful, let alone moving to another area.

steampowered

Hopefully you have some equity left from the deposit you put in?

If you have negative equity and you sell the property, you will be expected to make up the shortfall.

If you have a small bit of equity, that's all that will be left if you sell. If that isn't enough to fund a deposit to buy a new place you'd either have to stay with your parents or rent.

You could consider letting out your current property, and renting somewhere closer to your parents. There would be costs involved with that (e.g. letting agents fees, taxes) and you'd need consent to let from your lender, but it could be a temporary workaround.

RelievedSheff

What is the property worth and what it the mortgage amount left owing?

Does the difference give you enough to cover the deposit of the new place and legal fees, moving costs, estate agents fees, etc.

If the answer is yes then you can afford to move. If the answer is no then you can't.