Getting off the property ladder!

4grand

Hi everyone.

A year ago my fiancee and I decided it was time to settle down and we bought our first house in a nice village and moved in in December last year.

NOW our circumstances have changed and we are considering moving to London, which is more than an easy commute away, so a relocation is on the cards!

How do you go about selling your house, and then renting again? What I mean is, what happens to my mortgage?

We are on a variable rate that expires in November this year or next year (can't quite remember!).

We bought a one bedroomed character bungalow and are just in the process of finishing re-doing it, with a view to putting it on the market.

What happens to the mortgage if we want to get off the property ladder?

2bmortgage3

You pay off your mortgage with the sale of your house. If you have made money doing it up that will be a nice profit. If you have lost money in current market, you would have to make up the shortfall...

Dont forget you also have to pay estate agents fees and solcitor fees which can all vary. Also check there is no early redemption fee with your mortgage provider - however this only usually applies if agreed to a fixed term contract.

You need to get the house valued really and work out the sums from there...

Goodluck!!

Mutton_Geoff

House is sold, solicitor handles sales proceeds, pays off mortgage first, takes their fee and pays estate agents invoice (if you used one) then sends the balance to your bank account. The mortgage needs to be paid off (redeemed) before the house can be transferred to the new owners. Again, solicitor does all this and it's usually all co-ordinated for completion day when (hopefully) you walk away with a cheque in your hand, no property, no mortgage.

4grand

That simple!

What kind of fees should I be looking out for? Here is what I understand:

Estate agent fees - about 1.5% plus VAT
Solicitor Fees - about £1000
HIP - about £500

Anything else?

We bought the property for £165,000, with a £10,000 deposit, and *hope* to sell for in excess of £180,000, if that helps.

Are there any early repayment charges I should worry about?

PasturesNew

4grand wrote: »

Are there any early repayment charges I should worry about?

Only you will know that. You will need to dig out your mortgage papers and see what deal you signed up for. You need to look for and understand your tie-ins and do the sums from the paperwork.

If it's a fixed rate for a period of time, then it could be quite hefty.

2bmortgage3

No that should be about it with fees - unless any other complications turn up during the sale which would increase solicitor fees but you never know that till you start...

Regarding redemption charges you will need to ring your mortgage broker and ask them directly.

I just sold my property and had to take a drop as the market is just not what the estate agents seem to be valuing at, so be realistic. However we were in a hurry and if your not you can sit and wait for the best offer...

Again goodluck

4grand

Thank you everyone, we probably will sit and wait for the best offer if we do go for it!

One mor ething, if we do decide to buy again after having sold our house and started renting again, would we be classed as first time buyers again?

2bmortgage3

Usually yes, as no chain and in an ideal position to procede quickly. Being without a house to sell is always a good position to be in and will give you bargaining power...