Buying a house(4 Posts)
This may seem a stupid question
We have a house, when we bought it we were first time buyers.
We are looking to buy a bigger house - but will need to sell ours to buy new house, plus savings, plus bigger mortgage.
What order do we do things in?
Do we get ours on the market first and see if anyone wants it?
Do we get a new mortgage in principle so we can see if we can afford a bigger house? If we can't then everything else is academic.
I am hoping to make a fair bit on the sale of current house to help afford new house as deposit - how does this work? Is there a tax implication?
What happens if we sell our houose but can't find a new one? I want a forever home so may be looking for a while to find something perfect but affordable? I also don't want to rent as it will be too disturbing for the DC.
No tax is payable on proceeds of your current house (assuming it's your only house) so anything you have left after paying off mortgage, paying estate agent and paying other moving costs is yours to keep/put towards new house.
As regards funding deposit - usually you exchange on the house you are selling and the house you are buying on the same day. This means you use the deposit you get from your buyer, to fund the deposit you pay to the vendor of your new house. If the deposit on your new house is bigger than the deposit your buyer is paying, you'll need to find the extra from somewhere (usually savings). You won't get all the sale proceeds from your old house, or the mortgage money, till completion.
Yes speak to mortgage companies first about what they will lend you. A mortgage in principle will help estate agents take you seriously.
Whether you put your house on the market first, or find somewhere to buy first, depends on the situation. Is your house likely to sell fairly quickly? Are you looking for something quite unusual/are you likely to take a long time to find somewhere? If so then suggest you find the house you want and then put yours on the market. However if your current house is likely to take a while to sell, and/or if the houses you are after are in hot demand, then it's better to put yours on the market first. In a fast moving market estate agents are only interested if your own property is already on the market/ideally under offer.
Sounds like you will be looking for a while so suggest you find what you want first! But when you do find the perfect place, you'll need to sell yours quickly, so make sure your house is in very easily saleable condition and you may also need to price a bit lower in order to sell quickly.
The other option is sell your house on its own, then move into rented while you look around for perfect house. But that's expensive (rent plus extra move costs) and you could end up priced out of the market if prices are rising where you are looking.
everything Minnipie has said - it is a bit chicken and egg. If you find the property of your dreams and are not even on the market then you don't stand a chance of getting an offer accepted until you are in a position to proceed. It does depend on what the market is like where you are but I think I would put my house on the market and start looking around. If you get a really good offer on yours but still haven't found you could think of going into rented. If you find first and then put yours on you could easily be pipped at the post whilst trying to get a buyer and then ending up with your house on the market and nothing to go to - which is where you are starting off in the first place! Good luck!
thank you for the info
any chance I can win half a mill on the lottery so I can buy a half decent house round here with no stress?
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