Selling to release capital

Dannyboy6

I've got a mortgage for £76,000 with Northern rock at the moment and am wanting to sell my house which I have only lived in since August in order to free some cash up for another venture I have planned. I am planning to borrow £6,000 or £7,000 to convert the loft into another bedroom before I sell. Once this is done I expect to get just over £100,000 for the property but I'd like to know how much of the profit would be eaten up by any taxes I may be subject to, estate agents fees, solicitors fees, early mortgage repayment fees etc....

Hope someone can help with this.

Captain_Mainwaring_2

First look says STOP, you won't make a penny out of it.

Let's take a quick look -
100K-76K=24K
24K-7K=17K

Then we have to look at how much deposit you put down together with legals - let's say 7.5K deposit and .5K legals etc = 8K

The let's look at fees to sell - I'd guess at the better part of 1K

We don't know how much your early redemption may be, let's guess 2%, but looking at NR website, could be more than that = 1.5K maybe a bit more

So we have 17K-10.5K=6.5K, and that assumes you actually get the asking price.

It could be a lot less if you don't and the ER fees are higher.

I'd use the money you intended for the conversion to partially fund your project and look at other ways for any difference. While you retain the property you still have a potential source of income.

Firstly, what did you pay for it?

Dannyboy6

I bought the property for £63,500 and put a £5,000 deposit down. I also took out a loan that runs along side my mortgage for £18,000.

Unfortunately I can't borrow the money for the venture I'm wanting to carry out because I was counting on the profit from the house to pay it off.

My new venture is to emigrate to Australia so I'm really not bothered about keeping the house as I would be making a fresh start over there. Surely there is money to be made from my house, please help!!!!

Captain_Mainwaring_2

Captain_Mainwaring wrote: »

First look says STOP, you won't make a penny out of it.

Let's take a quick look -
100K-76K=24K
24K-7K=17K

Then we have to look at how much deposit you put down together with legals - let's say 7.5K deposit and .5K legals etc = 8K

The let's look at fees to sell - I'd guess at the better part of 1K

We don't know how much your early redemption may be, let's guess 2%, but looking at NR website, could be more than that = 1.5K maybe a bit more

So we have 17K-10.5K=6.5K, and that assumes you actually get the asking price.

It could be a lot less if you don't and the ER fees are higher.

I'd use the money you intended for the conversion to partially fund your project and look at other ways for any difference. While you retain the property you still have a potential source of income.

Firstly, what did you pay for it?

Add 2.5K to the 6.5K, giving you a possible 9K

Now, what would you get if you didn't do the loft conversion (and I have my doubts as to your costings)?

The irony of you situation is that is you were to take out secured loans up to the maximum and do a runner to Aus then you would actually "make" more out of the property by being dishonest.

I don't know what you are doing in Aus but 9K won't go far.

setmefree2

In London a loft conversion is £30k plus.

Dannyboy6

Thanks for your help, 9K is enough to get me started in Oz, it'll pay for my visa application and passage over there as long as I find a job to go straight into.

My costings to convert my loft I know are more than enough because I would be doing most of the work myself and it is partially done already. The only figure that is an estimate is the selling price. Really need to get the estate agents round to value it.

Captain_Mainwaring_2

Not trying to pee on your chips here but do you have full planning and fire regs for the conversion?

And living abroad (not far from Oz) I can tell you that you can soon get through a few quid on the formalities.