deposit question

bargain_babe

Sorry for maybe seeming a bit thick, but I have only moved house once and that was 10 years ago!
My house is for sale and is worth nearly 3 times more than I paid for it - sounds great, but obviously it's all relative as I need to purchase another. Can I class the equity I have in the house as the deposit or do I have to find that as a cash amount as well. I had a mortgage of £40000, and I have paid extra and bought the redemption figure down to approx £20000.
I wish to buy like for like and therefore only borrow £20,000 on say a £200,000 house. What actual cash deposit would I need to have? Sorry, but hope someone knows what I mean. Also would I be better off with a short term loan rather than a mortgage on this amount?
Thanks in advance
Bb

wymondham

As far as I'm aware, anything left once you redeem your existing mortgage is yours and can be classed as a deposit on your new place, but you'll be lucky to get a mortgage for only £20k - possibly get a flexible one for their minimum amount and overpay with a lump sum if they allow?? - experts will be along soon to clear it up for you i'm sure!!!

bargain_babe

thanks for the quick reply. I know I am lucky if I end up only having to borrow that amount, but I don't really know how's best to go about it all. Does anyone know what the minimum amount is to borrow? I am sure whatever I end up buying could do with improving so would be happy to borrow a bit more.

Dick_here

You'll need a few thousand for Stamp Duty, estate agents, solicitors and everything else that goes with moving too, remember.

ajaxgeezer

A lot of lenders quote a 50k minimum. I'm sure there are brokers here who will know of less though.

You could knock it up another £7200 (one for you and your hubby/partner) by borrowing this year's cash ISA allowance if you can fix a high ISA and find a lower-rate mortgage. That would help bump the minimum lend up.

You never know, a little bit of very safe money may be what a lender wants, the way things are going.