Selling house and buying quick maths question

user1977

Sell for £188k less £46k mortgage redemption = £142k equity

Buy for £270k less £46k ported mortgage less £108k additional borrowing = £116k cash needed

£142k - £116k = £26k cash left

ryan87

user1977 said:

Sell for £188k less £46k mortgage redemption = £142k equity

Buy for £270k less £46k ported mortgage less £108k additional borrowing = £116k cash needed

£142k - £116k = £26k cash left

Hi there this is what i thought at the start but

my question to this is why do we minus 46k from the buying price when the 46k is being is being transferred to the new house 

my buyers are paying 188k why do we take 46k off this when its being carried over to the next house ?

user1977

ryan87 said:

user1977 said:

Sell for £188k less £46k mortgage redemption = £142k equity

Buy for £270k less £46k ported mortgage less £108k additional borrowing = £116k cash needed

£142k - £116k = £26k cash left

Hi there this is what i thought at the start but

my question to this is why do we minus 46k from the buying price when the 46k is being is being transferred to the new house 

my buyers are paying 188k why do we take 46k off this when its being carried over to the next house ?

Because that's how it works. It's a mortgage on your current house, so when you sell, it needs to be paid off. On completion of the sale, you are left with £142k.

For your purchase, your lender is lending you a total of £154k. So you need £116k from the sale to make up the balance.

Ignore the porting and the sub accounts, it is just confusing you.

Or to put it a different way, if you're not deducting the £46k from the sale price, you can't add it in again to make up the new price.

GDB2222

No. You are out by the £46k. You will get £26k back less fees.

theoretica

ryan87 said:

user1977 said:

Sell for £188k less £46k mortgage redemption = £142k equity

Buy for £270k less £46k ported mortgage less £108k additional borrowing = £116k cash needed

£142k - £116k = £26k cash left

Hi there this is what i thought at the start but

my question to this is why do we minus 46k from the buying price when the 46k is being is being transferred to the new house 

my buyers are paying 188k why do we take 46k off this when its being carried over to the next house ?

You can also look at it that the you are moving the mortgage to the new house - so that 46k needs to go to the seller of that house and not to your pocket.  Otherwise the seller of that house would only get £116k from your cash and £108k from the new mortgage.

jackieblack

Another way of looking at it…
New mortgage borrowing is £108k more than current mortgage (£154k-£42k), but new house price is £82k more than current home (£270k-£188k),
so £108k - £82k = £26k, which is what will end up in your pocket (less fees)

GDB2222

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

MultiFuelBurner

GDB2222 said:

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

GDB2222 said:

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

Now you have the maths wrong it's a £270k house..easily done we have miscalculated ourselves on house and mortgages and porting and equity.

I think the £380k.came from projected price after renovation.

GDB2222

MultiFuelBurner said:

GDB2222 said:

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

GDB2222 said:

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

Now you have the maths wrong it's a £270k house..easily done we have miscalculated ourselves on house and mortgages and porting and equity.

I think the £380k.came from projected price after renovation.

No, I had the maths right. The op was forecasting £380k value after renovation using the £72k he thought was left over from the £270k purchase. Whether he can actually add more value than the cost of renovating is another question. 

MultiFuelBurner

GDB2222 said:

MultiFuelBurner said:

GDB2222 said:

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

GDB2222 said:

To be fair to the op, he realised something must be wrong with his maths, which is why he asked the question.

It is pretty obvious that you can’t switch a £180k house into a £380k house just by increasing the mortgage by £100k.

Now you have the maths wrong it's a £270k house..easily done we have miscalculated ourselves on house and mortgages and porting and equity.

I think the £380k.came from projected price after renovation.

No, I had the maths right. The op was forecasting £380k value after renovation using the £72k he thought was left over from the £270k purchase. Whether he can actually add more value than the cost of renovating is another question. 

You silly billy for the drama £180k into £380k shocker let's get the daily mail involved lol