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Does this property move make good financial sense?

(16 Posts)
TheBreastmilksOnMe Sun 23-Mar-14 19:51:36

Ok mumsnetters can you help me work this out? We bought our home 6 years ago and paid £121,000 for it, it was on sale for £125,000. We paid £10,000 deposit so took out a mortgage of £111,000.

Fast forward to today, the property next door sold for £112,000 so we know with the recession how much value we've lost and we are guessing this is how much our property would sell for.

There is a house in the next street which is of similar size to ours but they have converted the attic into two extra bedrooms plus the bedrooms are a bit bigger anyway and it's going for £105, 000 so im guessing would perhaps sell for £95,000?.

Without any money to put towards anything how would we buy this house? By selling ours would we be left with anything? How much after fees etc? I cant work it out in my head or whether it would be even worth it? But it's got extra bedrooms! Help me work it out please!

SolomanDaisy Sun 23-Mar-14 19:54:34

Firstly, how much have you paid off on your mortgage? Not much, but over 6 years it might be enough to make a difference.

TheBreastmilksOnMe Sun 23-Mar-14 19:57:45

I really dont know Soloman as dp does the admin in this house and he's not in to ask yet but we pay around £550 a month part interest part mortgage if that helps?

ShoeWhore Sun 23-Mar-14 20:06:23

Soloman is right - you need to know the balance on your mortgage really.

You wouldn't have to pay stamp duty on the new house as it's below the £125k threshold but you would need to pay solicitor's fees, estate agent fees (here they charge 1% plus an upfront charge for producing the marketing stuff) and of course removals if you need them.

The other question I would be asking is why is this other house priced more cheaply than yours if it has more room?

SolomanDaisy Sun 23-Mar-14 20:07:28

It makes a big difference in this case, I think. You need to have at least five per cent deposit for the next property, preferably ten. If you've paid off £10k of your mortgage, you have that. You'll then need estate agent fees, solicitor fees and moving costs. I'd guess at around £2k total for that. So if the amount outstanding on your mortgage is £100k, you can do that. If it's £105k, you might be able to get a 95% mortgage. That assumes you can get exactly the same price as next door.

Why is the next road so much cheaper?

TheBreastmilksOnMe Sun 23-Mar-14 20:11:26

Ok thanks. I honestly dont know, maybe we have a larger garden? I havnt been to see it ive only looked on the website. We do have a bigger garden then most where we live.

ShoeWhore Sun 23-Mar-14 20:12:34

OP do you know your interest rate and how long the mortgage term is? I can estimate the amount left on the mortgage from that.

TheBreastmilksOnMe Sun 23-Mar-14 20:14:56

I will have to wait till dp gets home in a bit to ask i know we were at a fixed rate for 5yrs then dropped to a lower rate last year. I'll find out.

TheBreastmilksOnMe Sun 23-Mar-14 20:51:23

£101,000 is what's left.

EggInABap Sun 23-Mar-14 20:58:53

Couldn't you convert your attic?

TheBreastmilksOnMe Sun 23-Mar-14 20:59:48

We dont have 2p to rub together!

SolomanDaisy Sun 23-Mar-14 21:23:15

It is maybe doable then, though very tight. You could put your house on with a no sale no fee agent and see what happens?

Slapperati Sun 23-Mar-14 21:30:31

So if you sell your house for £112,000, minus 1% fees and conservative moving / conveyancing costs of £1,000 you will have £110,000.

Settling with your mortgage company gives you £9,000 left (assuming no early redemption fees). Realistically you would want to set aside at least £1,000 contingency/redecoration etc.

So buying a house at £95,000 gives you a £87,000 mortgage and £8,000 deposit.

Can you work out what the repayment would be on that (over the same term) compared to your existing mortgage?

TheBreastmilksOnMe Sun 23-Mar-14 22:22:56

Yes that makes sense thank you. Do people normally buy a house cheaper than their current property? Is it the wrong way down the property ladder!

MrsDonnaLyman Sun 23-Mar-14 22:30:06

Message withdrawn at poster's request.

NoArmaniNoPunani Sun 23-Mar-14 22:34:40

I'm suspicious as to why this property is larger than yours but worth less. There must be a reason

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