stamp duty, fees, ea fees etc How do I afford these? Suggestions most welcome.(14 Posts)
In short, yes, they can come out of your sale. Your EA fees, stamp duty, etc will be paid by your solicitor on closing (assuming there is enough money from your sale). Out of pocket costs may be application fees for your new mortgage (if you take one one, also may be added to mortgage with some lenders), survey fees on next house, etc.
In general, everything can come out of the sale proceeds except for the deposit on your next house. And the deposit is usually funded out of the deposit that your buyer will be paying to you. If the deposit on your purchase is bigger than the deposit from your buyer, you may need to make up the difference, unless you can negotiate a smaller deposit with the people you are buying from.
For this to work, you need to make sure exchange and completion on the house you are selling happens before, or at the same time as, exchange and completion on the house you are buying. Ie the classic "chain".
Mortgage application fees and survey costs are often not paid in cash but instead are added to your new mortgage - but depends on the mortgage lender.
Deposit can't be funded from the sale of your house as it needs to be provided at exchange and you won't have the sale proceeds at that point.
You should be getting £12.5k from your buyer (10% of £125k sale price). I presume the house you are buying is £300k, hence £30k deposit?
If you can't raise the £17.5k difference, then you will need to get the person you are buying from to agree to accept only £12.5k deposit, or whatever you can increase that to using savings. Can you increase it to £15k, i.e. £12.5 from your buyer and 2.5k savings? If so, £15k would be 5% which would not be unusual as a deposit.
In Scotland so it might be different - but when we bought and sold, ALL of our expenses came out of our selling price. It all happened on the same day (don't know ins and outs - all dealt with by solicitor) We certainly didn't need any additional cash on top of what our house made?? And we don't do the deposit thing either - all monies paid at completion?
When I was recently filling in our legal paperwork there was an option on the form 'deposit funded by sale of current home', so there must be a way for the deposit to come out of house sale proceeds. Ask your solicitor though to confirm!
Yep speak to your solicitor, they will need to ask your vendor to accept a £12.5k rather than £22k deposit. Shouldn't be too controversial.
Agree though that you will want to keep some cash for other costs before completion - eg solicitors' fees are usually paid at completion but they often want money in advance to cover the costs of the searches they do (a few hundred pounds).
What often happens is that you will be liable for 10% deposit upon exchange but the actual amount you pay is often less than this - and often the deposit which has come up the chain. There is also the possibility to exchange and complete on the same day - there it does not become an issue.
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