Moving house question - Deposit

LukeS99

Hi all,

I had a question as I cannot seem to find a clear answer wherever I look. Long story short, our first house which is shared ownership we put down a £9,000 deposit. We are looking to move in the next year - we’ve paid off roughly 4K of the mortgage, my question is does our previous deposit for this place and the 4K paid off on our mortgage go towards a deposit for the next home? Just trying to figure out whether we need to save a whole new deposit or whether we need to save part of a deposit and the rest will come from our home we live in now? 

Any help on this would be appreciated! 

Thanks 

Luke

DE_612183

What you are looking for is equity - this is the difference between what you owe on the property and what you sell it for.

For example if the house you live in cost £100k, you paid £9k and then £4k so you owe £87k - you sell for £100k and the £13k end up back in your pocket as a deposit.

Hopefully what happens though is that you sell for £110k as the house value has gone up - so end up with £23k equity - or cash for the deposit for your next house.

Of course if you sell for £88k - you just end up with £1,000.

Does that make sense?

TheJP

Also worth noting that usually when selling a house and buying a new one the seller will accept a lower than 10% deposit which usually comes in the form of the deposit from the bottom of the chain that is passed up, technically you dont handover any money or see the money.