PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Taking equity out when moving

Options
brendanb581
brendanb581 Posts: 144 Forumite
Part of the Furniture 10 Posts Combo Breaker
edited 14 January 2022 at 1:41PM in House buying, renting & selling
This might be a stupid question but just wanted to clarify...

We are looking at selling our property for £260,000. We currently owe £130,000 on the mortgage so should have £130,000 equity.

THe house we are looking at buying is about £360,000.

Can we choose to put only £90,000 of the equity into the deposit for the new hous? Or do we have to put all the proceeds of the sale into the new house because it costs more?

The idea is to keep £30-40,000 aside for the future (possible extension / improvements etc)

Just wanted clarification...Thanks!

Comments

  • matt1987
    matt1987 Posts: 899 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    You can choose, as long as your within the lenders minimum LTV.

    Dont forget it could affect the interest rates on the mortgage though.
  • Mahsroh
    Mahsroh Posts: 769 Forumite
    Sixth Anniversary 500 Posts Name Dropper Combo Breaker
    This might be a stupid question but just wanted to clarify...

    We are looking at selling our property for £260,000. We currently owe £130,000 on the mortgage so should have £130,000 equity.

    THe house we are looking at buying is about £360,000.

    Can we choose to put only £90,000 of the equity into the deposit for the new hous? Or do we have to put all the proceeds of the sale into the new house because it costs more?

    The idea is to keep £30-40,000 aside for the future (possible extension / improvements etc)

    Just wanted clarification...Thanks!
    Yes as already said above. You can do this provided you can get the mortgage you need of £270k Rates may be slightly higher but if you're putting a £90k deposit down on a £360k house you should be able to get some decent rates anyway. 

    Just bear in mind your moving costs though. If you have £130k equity and plan on using £90k of that you'll be pushing it to have £30k left in the bank at the end by the time you've paid Stamp Duty, Solicitors fees, EA costs, possible early repayment charges (?), removals etc. 

    I worked out recently that our recent move cost us nearly £18k not counting the actual cost of the house/deposit. Albeit that included some new furniture/white goods purchases etc. Just over half of that was in stamp duty alone
  • GDB2222
    GDB2222 Posts: 26,171 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Estate agents round here include a stamp duty calculation in their listings. It's quite depressing.
    No reliance should be placed on the above! Absolutely none, do you hear?
  • badger09
    badger09 Posts: 11,572 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    GDB2222 said:
    Estate agents round here include a stamp duty calculation in their listings. It's quite depressing.
    But could prevent a nasty shock for some potential purchasers who haven't done their homework :*
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Consider the LTV
    On a £360,000 property £90,000 is a 25% deposit so 75%LTV.
    You could also look at Offset mortgages where you put all your spare money and regular savings into the Offset account ( extension fund ) 
    Great way to build up savings to pay for any work in stages
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.6K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.