Moving house and equity

MWT

Joeisaware539 said:

I forgot to add, it’s our second house. Our current house is a 3 bedroom semi detached. I should of included above but can’t edit so included in new post.

Very little of this is making much sense, are you saying that the 'current house' you describe above is the one with the mortgage?

Are you planning to keep your current house and buy the new house in the gated development as your 2nd house?

CSL0183

Joeisaware539 said:

MWT said:

Porting to avoid an ERC is not unusual.

Sounds like a solid plan as long as your lender agrees and you can pass the AML checks for the source of your cash then you should be fine.

Yes, lender has agreed. We will use £450,000 to £600,000  approx of our own cash depending on house to choose from, allot of people have said checks for this sum? 

We are moving to a gated development with 5 executive houses within the plot. Developer has said if we reserve early we can spec hence urgency.

After our intention is to pay the mortgage off in full within a few years once ERC passed and on SVR. 

Yes, if you have suddenly come into a lot of money, there are strict checks carried out on the source of that money and where it has come from for money laundering reasons. Drug or proceeds of crime money etc. This is checked back through every account so even if a parent gifted you £500k, the solicitors would then track back through where the £500k come from within your parents bank accounts etc, that could go on and on until the source of the money can be verified. That’s why drug dealers and the likes will buy small businesses and launder money through them to give themselves “clean” funds to buy property but then there are strict checks made on business accounts too. 

As long as your sudden influx of cash checks out then you should have no worries with the verification checks. 

MWT

Joeisaware539 said:

Yes, lender has agreed. We will use £450,000 to £600,000  approx of our own cash depending on house to choose from, allot of people have said checks for this sum?

Yes, with a cash payment of that size your solicitor will require evidence for the source of the funds.

For example if it came from stock market trading, or a lottery win you would be easily able to show documentary evidence of this.

If it has been transferred to you from another country then you will have to get verification of the source of those funds or your solicitor will not be able to accept them as part of your property payment...

Joeisaware539

CSL0183 said:

Your outstanding mortgage is only £125k though. You are portraying yourself as a young couple that are cash rich and now  your neighbours are jealous of you? 

How does one suddenly afford to move from a £200k house to a £900k one? Of course, that’s none of my business, I suspect an Inheritance or a lottery win of some sorts but given that you have created an image of yourself as cash rich then I’m not sure I understand the real need to fart about with a £2k or so ERC penalty? Especially given the fact that if you are so cash rich then you will get the very best LTV and rate on the market. If you offset the cost of that saving against the ERC of a small £125k mortgage then it would likely cost you just peanuts. 

If I had £700k cash sat in my bank account like you say you do, last thing I would be doing would be farting about with an ERC on a £125k mortgage. 

Can the £700k you suddenly have in cash in your bank account be fully certified? Every penny needs to be tracked back with scrutiny. If so, then good luck and remember and set aside some hefty stamp duty fees for your new purchase. 

Unusual thread. 

We set up a business in March 2013 we supply cleaning materials to many industries. Covid has accelerated our growth. 

Joeisaware539

CSL0183 said:

The maths don’t really stack up either,

You purchased for £178,000 with a £30,000 deposit which left a mortgage balance of £148,000. Today, that house is worth £234,000 and you have a £125,000 mortgage remaining. So in summary you have paid off £23,000 capital and the house value has increased by £56,000. Added to the deposit, you have equity of around £109,000. If you are cash rich, why have you only paid off £23k?

Suppose that doesn’t really matter but then you go onto say that this will be a 2nd house in a post above? That would have huge ramifications for tax issues, 3% additional tax + stamp duty if in England but a lot more if in Scotland or Wales. 

You then go onto say you will use £450-£600k of your own money to buy the £525k-£890k house? Those are very specific numbers? 

Regardless, surely if you sold your existing property for its £234k and ported over the £125k mortgage, you would be short of money to purchase the £890k house, even with the £600k cash injection. (Never mind the legal fees you would need for a house in this price range) 

Sorry, figures seem to be all over the place as does the “reason” for trying to save peanuts on an ERC for a small mortgage (in relation to the purchase price of a £900k house). 

I hope it all works out for you and your new neighbours aren’t as jealous as your old ones. 

CSL0183 said:

The maths don’t really stack up either,

You purchased for £178,000 with a £30,000 deposit which left a mortgage balance of £148,000. Today, that house is worth £234,000 and you have a £125,000 mortgage remaining. So in summary you have paid off £23,000 capital and the house value has increased by £56,000. Added to the deposit, you have equity of around £109,000. If you are cash rich, why have you only paid off £23k?

Suppose that doesn’t really matter but then you go onto say that this will be a 2nd house in a post above? That would have huge ramifications for tax issues, 3% additional tax + stamp duty if in England but a lot more if in Scotland or Wales. 

You then go onto say you will use £450-£600k of your own money to buy the £525k-£890k house? Those are very specific numbers? 

Regardless, surely if you sold your existing property for its £234k and ported over the £125k mortgage, you would be short of money to purchase the £890k house, even with the £600k cash injection. (Never mind the legal fees you would need for a house in this price range) 

Sorry, figures seem to be all over the place as does the “reason” for trying to save peanuts on an ERC for a small mortgage (in relation to the purchase price of a £900k house). 

I hope it all works out for you and your new neighbours aren’t as jealous as your old ones. 

We redeveloped our existing house, it was in a really bad state when purchased. 

Everything has been done, kitchen diner walls knocked through, bathrooms. Brand new windows; every inch of the house previously has been removed. This is the amounts estate agents have given us as values.

Joeisaware539

MWT said:

Joeisaware539 said:

I forgot to add, it’s our second house. Our current house is a 3 bedroom semi detached. I should of included above but can’t edit so included in new post.

Very little of this is making much sense, are you saying that the 'current house' you describe above is the one with the mortgage?

Are you planning to keep your current house and buy the new house in the gated development as your 2nd house?

No, we sell this one and nee home is our main family home. 

Joeisaware539

MWT said:

Joeisaware539 said:

Yes, lender has agreed. We will use £450,000 to £600,000  approx of our own cash depending on house to choose from, allot of people have said checks for this sum?

Yes, with a cash payment of that size your solicitor will require evidence for the source of the funds.

For example if it came from stock market trading, or a lottery win you would be easily able to show documentary evidence of this.

If it has been transferred to you from another country then you will have to get verification of the source of those funds or your solicitor will not be able to accept them as part of your property payment...

Dividends from business profits. We can provide all evidence of this?

Joeisaware539

CSL0183 said:

Your outstanding mortgage is only £125k though. You are portraying yourself as a young couple that are cash rich and now  your neighbours are jealous of you? 

How does one suddenly afford to move from a £200k house to a £900k one? Of course, that’s none of my business, I suspect an Inheritance or a lottery win of some sorts but given that you have created an image of yourself as cash rich then I’m not sure I understand the real need to fart about with a £2k or so ERC penalty? Especially given the fact that if you are so cash rich then you will get the very best LTV and rate on the market. If you offset the cost of that saving against the ERC of a small £125k mortgage then it would likely cost you just peanuts. 

If I had £700k cash sat in my bank account like you say you do, last thing I would be doing would be farting about with an ERC on a £125k mortgage. 

Can the £700k you suddenly have in cash in your bank account be fully certified? Every penny needs to be tracked back with scrutiny. If so, then good luck and remember and set aside some hefty stamp duty fees for your new purchase. 

Unusual thread. 

Dividends from company?

Joeisaware539

CSL0183 said:

Joeisaware539 said:

MWT said:

Porting to avoid an ERC is not unusual.

Sounds like a solid plan as long as your lender agrees and you can pass the AML checks for the source of your cash then you should be fine.

Yes, lender has agreed. We will use £450,000 to £600,000  approx of our own cash depending on house to choose from, allot of people have said checks for this sum? 

We are moving to a gated development with 5 executive houses within the plot. Developer has said if we reserve early we can spec hence urgency.

After our intention is to pay the mortgage off in full within a few years once ERC passed and on SVR. 

Yes, if you have suddenly come into a lot of money, there are strict checks carried out on the source of that money and where it has come from for money laundering reasons. Drug or proceeds of crime money etc. This is checked back through every account so even if a parent gifted you £500k, the solicitors would then track back through where the £500k come from within your parents bank accounts etc, that could go on and on until the source of the money can be verified. That’s why drug dealers and the likes will buy small businesses and launder money through them to give themselves “clean” funds to buy property but then there are strict checks made on business accounts too. 

As long as your sudden influx of cash checks out then you should have no worries with the verification checks. 

Dividends from me and my wife’s business, original source our business bank account MF then forwarded large amounts to our personal accounts all done via our accountant who has given us dividend tokens etc.

Redwino222

Congratulations on your success.  I really do think you need some financial advise as you don’t really seem to fully understand the processes. 
enjoy your new home,