Second House Purchase Question - What can I afford

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BeckyBoo91
BeckyBoo91 Posts: 3 Newbie
in Mortgages & endowments
Hi

I bought a house in December for £150,000

It was valued at £175,000 last week.

If I was to sell it and get £175,000 for it what house can I afford. Does this mean I hypothetically have gained £25,000 + by £15,000 deposit back in December. So do I have '£40,000' floating to use as my next deposit? So hypothetically afford a house worth £200,000

Or does it simply mean I can now afford a house which is £175,000?

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  • kingstreet
    kingstreet Posts: 38,767 Forumite
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    You have the sale price, less the outstanding mortgage, less any cost/fees. This is your residual equity, or your deposit, if you like.

    You will add this to the amount of mortgage you can obtain and the two figures added together equal the purchase price of your next property.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    Less stamp duty and buying fees of course.
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
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    What have you done to your property to add £25,000 to the value in 6 months ?
    Buying and selling costs, mortgage fees, survey, moving costs must all be taken into account.
  • GoingOn30
    GoingOn30 Posts: 231 Forumite
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    Presumably you've had it valued by an estate agent, and it's in their interest to value it high so you choose them to sell your property.

    You won't know the value of the property until it is for sale and you get a proceedable offer.
  • BeckyBoo91
    BeckyBoo91 Posts: 3 Newbie
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    I understand the above - but what I am asking is what house price MAXIMUM can I afford based on my house now being worth £175,000?
  • BeckyBoo91
    BeckyBoo91 Posts: 3 Newbie
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    Flooring, new bathroom and painted the walls.

    I understand the above - but what I am asking is what house price MAXIMUM can I afford based on my house now being worth £175,000?
  • kingstreet
    kingstreet Posts: 38,767 Forumite
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    Answered in post 2.
    You have the sale price, less the outstanding mortgage, less any cost/fees. This is your residual equity, or your deposit, if you like.

    You will add this to the amount of mortgage you can obtain and the two figures added together equal the purchase price of your next property.
    ... and stop shouting.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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