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stamp duty - how to pay

sportbeth
sportbeth Posts: 621 Forumite
in House buying, renting & selling
This might be a dumb question. But if you have to pay a whacking stamp duty, how do you pay it? E.G. We have £14k deposit including equity, which is what we need. Forgot totally about the £8700 stamp duty.

Can you mortgage up the value of the Stamp Duty or do you have to have it sitting in your own pocket first?

Comments

  • hopefulfooluk
    hopefulfooluk Posts: 2,441 Forumite
    First Anniversary First Post Combo Breaker
    your solicitor will pay it on completion. Many people take out enough mortgage to cover the stamp duty if they don't have the money readily available, but it will impact your deposit if you do that so you may end up having to pay a higher APR if you do.

    Hope this helps!

    Chris
  • sportbeth
    sportbeth Posts: 621 Forumite
    Thanks for that. We had budgeted for up to a £300k mortgage in the first place and the vendor agreed an offer at £290k, £10k under the asking price so he was obviously aware of the issue for buyers of the stamp duty.

    Reading through some of the threads on here we've not done disastrously badly if we've knocked down on the asking price then had to pay a bit more than we thought on the stamp duty. We just had a bit of a sudden panic when we thought that we'd have to give that up front as well! That would be about £25k we'd have to have floating around. Who has that?
  • payless
    payless Posts: 6,957 Forumite
    Name Dropper Combo Breaker First Post First Anniversary
    If you only have £14K ( assume you mean £14500- thats 5% of £290K) then if you use £8700 on S/D your deposit will be less than 5% ( more like 2%)- being allowed to add it to mortgage won't change this fact!


    ( have you also looked at how you will cover all the other costs involved ?)

    Mortgage deals are usually tiered
    upto 75% LTV
    75-90%
    90-95%
    95-100%
    over 100%

    so expect to pay a higher rate in the higher tiers and possibly even a "higher advance charge" ( migp)
    although not all lenders charge this, and some do offer different tiering
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
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