New Build Part Exchange

manleyl23 · 18 April at 3:22PM

Hello, just looking for some advice on the above.

My partner and I are looking at part exchanging our current home for a new build. I'm just a little unclear on the process. Obviously the developers will be looking to buy our current home, and I know it will more than likely be an offer slightly under market value, as I've seen most saying they came up against the same thing. I'm not concerned about that, just on the details.

We currently have around 45k left on our current mortgage. We've had our property valued at around 95-100k, so decent equity there.

I'm just wondering, how does part exchange work? Would the money from the sale of our property go to clearing the remainder of the mortgage and then the rest towards the cost of the new build, or would be be able to decide to only put down the necessary deposit % and keep the rest for ourselves?

SarahB16 · 18 April at 4:16PM

manleyl23 said:

Hello, just looking for some advice on the above.

My partner and I are looking at part exchanging our current home for a new build. I'm just a little unclear on the process. Obviously the developers will be looking to buy our current home, and I know it will more than likely be an offer slightly under market value, as I've seen most saying they came up against the same thing. I'm not concerned about that, just on the details.

We currently have around 45k left on our current mortgage. We've had our property valued at around 95-100k, so decent equity there.

I'm just wondering, how does part exchange work? Would the money from the sale of our property go to clearing the remainder of the mortgage and then the rest towards the cost of the new build, or would be be able to decide to only put down the necessary deposit % and keep the rest for ourselves?

Has the developer advertised that they offer part exchange or said to you that they are willing to do this? Not all schemes/developers offer this. Your post reads as though it's a given but I'm not sure where that has been communicated to you?

Or perhaps you are fact finding and you will then approach the developer to see if they would offer this to you?

Your property is valued you say at £95-£100k however it's not clear if what you are selling is a house or a flat?

If you could kindly provide some much information we will be able to help you further.

steadfast123 · 18 April at 4:27PM

Hi, we part exchanged our house for a new build recently. We decided how much equity we wanted to put down as the mortgage deposit so anything above what you need to pay the existing mortgage you can choose- obviously so long as it fits in with the LTV for the mortgage. We got less than we had the house on the market for but they gave us £6k incentive plus other upgrades in the house as it was nearly complete. We were able to keep the keys to the old house over the weekend after moving on the Friday- which made things easier with cleaning. A license to occupy was arranged through the solicitor for this. All in all it was a very stress free and quick process.

silvercar · 18 April at 8:15PM

Say the developers were offering you 90k for yours and the new house costs 130. You have 90-45=45 equity in your place, so need to find 130-45=85 more, so either take a new mortgage for 85k or take less and use some savings. Your existing mortgage is cleared when your house is sold.