Moving house mortgage help please!!

sandford6016

Hi,

We have seen a property we really want, it is up for £209,000. I've had mine valued today by 3 agents the outcomes are below:

1. Richard Worth estate agents - £135,000 - 1.25% agents fee, advertises on all websites & local papers.
2. Prospect estate agents - £140,000 but will advertise at 'offers in excess of £130,000' - 2.5% agents fee, advertise all websites and local papers
3. Red Homes Estate agents - £135,000 to £145,000 - 0.5% agents fee, only advertises on Rightmove website, and lets me set the price, and will review after 2 weeks and reduce as required.

I really can't decide which to go for, I'm pretty much ruling out option 2, I didn't like the guy anyway. But I can't decide between options 1 and 3, do I go for the slightly higher fee but better advertising, or the lower fee with it only advertised on rightmove (but I believe rightmove sells 90% of house these days???)

Also, need mortgage advice! I need mine to sell to give the deposit on the new place, I bought it 18 months ago for £112,000, but took out a mortgage of £116,00 with Northern Rock. The fixed rate ends on the 1st of July so ideally will move then to avoid the redemption fee from them. I earn £44,000 and my partner £23,000, do the experts amongst us see any problems with the figures we need??

I'm really stuck!! Thanks, in advance!

_Andy_

No the amount you're looking to borrow seems straightforward.

sandford6016

Thanks Andy,

One more quick question! We currently do not have any substantial savings to cover fees and payments etc, so can these sort of things be consolodated into the mortgage loan and paid for on completion?

Sorry if these are silly questions, I have never sold anywhere before and am a bit scared!

_Andy_

Nothing silly about it.

OK well booking/arrangement fee can normally be added. Sols fees, stamp duty etc not.

Leon_W

I haven't done the calculations but as Andy says, usually when people move house they haven't got to hand the agents fees, stamp duty etc etc which can add up to many thousands of pounds. These funds generally come from the equity in your current property and are paid on completion.

What you need to do is work out what the estate agents + solicitor fees will be (inc stamp duty) Deduct this figure from any equity you have left (sale price minus mortgage) This will give you the deposit figure you will be putting down on the new house, the rest being taken up with a mortgage.

Regards

Leon_W

A few figures on your scenario...

Sale at £135000

Minus NR mortgage of £116000 = £19,000

Agents fee @1.25% = £1687.5 + VAT = £1982

Solicitors fees (buy and sell inc S/D) approx = £3700

Agents + Sols =£ 5682

£19000-£5682 = £13318 (Effective Deposit) which is just over 5% so in todays climate I don't think you'll be getting the best rate but as long as it's not a new build its doable.

Regards

Ian_Griffiths_Halifax

You should be ok but based on a sale figure of £140,000 (mid of £135-145) then these are your approx figures:

Costs =

£2090 Stamp Duty (1% of £209,000 Purchase Price)
£877 Estate Agents Fee (.5% of £140,000 sale price + VAT no doubt)
£300 Approx for a HIPs Pack on your house.
£650 Legal Fees (inc Disbursments) for your Purchase.
£400 Legal Fees (inc minimal Disbursments) for your Sale.
£116000 to redeem your mortgage (Your mortgage MUST be lower than this as Northern Rock lent a MAX of 95% secured on the property on an Interest Only Basis, so assuming a £106400 Interest Only mortgage, then £9600 was on the unsecured loan facility on a repayment basis, though you may have added arrangement fees to the mortgage and there MAY be Help With Costs - Assume £1000 - to repay if you come out of the mortgage within up to 3.5 years of taking out the mortgage. Check your mortgage offer letter or call Northern Rock to clarify).

Total Expenses as listed without £1000 Help With Costs to repay = approx £120,317

Sale Price £140,000 - £120,317 costs = £19683 Equity or potential Deposit.

£209000 Purchase Price - £19683 Deposit = £189317 mortgage required which is 90.58% of the value of the house.

If you can keep your borrowing to only £188100 (£20900 Deposit required) then you would be borrowing only 90% of the purchase price and are likely to get a better interest rate.

Borrowing £189317 on incomes of £44000 and £23000 = 2.83 X Joint Income so long as you have no loans or credit cards.

Hope this helps.