House swapping

jacooper

Can anyone please advise me. My next door neighbour has just plit with her husband and wants to down size. She has a good size 3 bed detached with a big garden (for a new house). It has potential to have a loft conversion and lots of room out the back for conservatory etc. Our house is a 3 bed semi ( mush smaller bedrooms)which has very litttle room for enlarging except a bog standard size conservatory.

What my neighbour has asked is whether we would be interested in buying hers and her to buy ours.

I think ours would sell for somewhere about £180k and hers has usually been about £70k more. I am not sure about whether we can afford it etc and that's something we obviously need to look into.
What I really wanted advice on is whether there is anyway around all the fees we have to pay. I know it sounds a bit crazy and you will have to excuse my ignorance. I know about searches etc and all that is usually done.

What if we gave her our house and she gave us hers and then independent of all that we paid her the diference?

Is there anyway we could get around stamp duty .....or if we did buy it as normal can we buy for the 250K cut off of lower stamp duty and then pay her cash for the difference.

Laugh me out of town if you like but I was just curious!!!!

Thanks

PasturesNew

The process is the same as if you were buying her house and she were buying yours as if you'd never met/known each other.

For the pricing, yours is £180k, hers is £250k, so the issue there would be stamp duty - and as they're both at 1% there's no benefit to dropping the price of both by, say, £10-20k to bring it under.

How easy it would be would be partly to do with:
- is it her house now, or does her other half want half the equity out?
- are you mortgageable at the higher amount?
- what is the size of your current mortgage?
- if there is a tie-in, is your mortgage portable or are there redemption fees?
- same for neighbour: mortgage size, tie-ins, portable, redemptions

It could be straight forward, or could be completely impossible. Depends on the above for starters.

jacooper

Thanks for that, we are tied in to a £112k mortgage but as long as we stayed with Nationwide we would just pay arrangement fee. Neighbour is due to rearrange her mortgage in June. Her other half does want equity from house .

What I wondered was couldn't a solicitor change our names on the deeds as if we had given each other our houses? Then we could pay our neighbour the difference in cash?She would then pay her ex.

It seems from what you are saying that this isn't possible. What a shame. I presume if we used the same solicitor we would only have to pay for one search etc as they have the same post code.

As you say I am not even sure if we could get a mortgage to cover . we earn about £60k between us and would need mortgage for190k?

amandajp_2

jacooper wrote: »

I presume if we used the same solicitor we would only have to pay for one search etc as they have the same post code.

Unfortunately you won't be able to save money here as I believe it is not permitted to use the same solicitor as this would be seen as conflict of interest and you will each need to have your own searches done.

However, I am not a legal expert so am happy to be contradicted if I am wrong.

Amanda

Doozergirl

jacooper wrote: »

Thanks for that, we are tied in to a £112k mortgage but as long as we stayed with Nationwide we would just pay arrangement fee. Neighbour is due to rearrange her mortgage in June. Her other half does want equity from house .

What I wondered was couldn't a solicitor change our names on the deeds as if we had given each other our houses? Then we could pay our neighbour the difference in cash?She would then pay her ex.

It seems from what you are saying that this isn't possible. What a shame. I presume if we used the same solicitor we would only have to pay for one search etc as they have the same post code.

As you say I am not even sure if we could get a mortgage to cover . we earn about £60k between us and would need mortgage for190k?

Income multiples you would probably get the mortgage. Whether you can afford it yourselves is your decision.

You need to go through the full conveyancing process because you both have mortgages. No mortgage company will be satisfied with you just putting your names on the deeds. They need to know that the house you buy provides good security for them. They're not that bothered what you think of the house

You could proportionally drop the price of each house a little to save a little on SDLT but you're only talking a couple of hundred in savings rather than a couple of thousand. At least there will be no Estate Agent fees.