House Equity Question

[thisismypassword]

Hi,

If we sell for £95k with a £55k mortgage, we'll obviously have £40k equity. Can I take £5k out to pay for moving fees etc and then use the rest for the next house deposit?

If yes, when would we get the £5k released so we can pay everyone?

Thanks

[Moving15]

On completion day you will get the equity credited to you by your solicitor. You will need removal fees and some conveyancing fees and mortgage booking and survey fees up front unfortunately.

[thisismypassword]

Thanks for the reply:

I was hoping to pay all that once I got the equity back... Darn!

If I just hire a van for removals, how much do you think we're talking?!

Van £75
.... What else before I can get the money?

[Bearbehind]

moving listed the things you'll need to pay for before you get the equity from your property.

The only way round some of them ie mortgage/ survey/ purchasing fees, is to sell your current property, move into rented, and make your onward purchase at a later date.

[Ruhrpott]

I think we paid £120 to hire a van for the weekend which I think included all of Friday till early Monday morning. We had a fee free mortgage but paid for the full survey we wanted (think it was about £450) and I think we paid £300 to the solicitor for searches etc and the rest of their bill was part of the completion bill.

[thisismypassword]

Right, so about £1000 then. Thanks for the help everyone :D

[Bearbehind]

OP, this might not be relevant but if you're very concerned about a few fees of just a few hundred pounds each because of affordability then your bigger concern might be getting a mortgage for an onward purchase.

If things are so tight you'd struggle to come up with these fees then you might well struggle to meet the new mortgage affordability criteria.

[WhatsGoingOnEh]

Don't forget your buyer will give you a deposit (around 10% I think) when you exchange. Maybe your solicitor would release £5k of that for fees?

[wowfudge]

But if there's a chain Whatsgoingon, that 10% gets passed up it so the OP can't take a chunk out at exchange. The solicitors will want disbursements paid for upfront.

DP is managing the budget for all this (we're in the process of selling our house and buying another) at the moment so we can keep track of everything. If you know you are getting money out at completion you can pay for things like removals on a credit card.

[thisismypassword]

But if there's a chain Whatsgoingon, that 10% gets passed up it so the OP can't take a chunk out at exchange. The solicitors will want disbursements paid for upfront.
**
Oh dear, I don't understand. I could afford £1000 in fees eg removal van, survey, initial solicitors fees but then we need to free up 5k of our 39k equity for the rest e.g. Stamp duty, estate agents fees and the rest of the solicitors fees.

Would that be possible? I thought it was a done thing to be honest. We can afford the mortgage but our money is in the house.

[willconcern]

Yes - stamp duty, solicitor's fees, estate agent fees can be (& usually are) paid from the equity. Your solicitor will deduct them all from the equity.

[Bearbehind]

You thinking you can afford the mortgage and a lender thinking the same are very different OP.

I'm guessing you last applied for a mortgage well before the MMR in 2014. It's a different world now.

Having real concerns over how to fund £1,000 fees rings huge alarm bells.

Before you do anything check out some often online mortgage calcluators (ones that ask for all your outgoings etc) and confirm that it looks like you can get another mortgage.

Whacking the expenses on a credit card is a very risky strategy as lenders may well carry out a credit search right up until the draw down of funds- getting declined after exchange but before completion as you've maxed out the credit cards would be a nightmare.

[thisismypassword]

Thank you all for your sage replies. I'm very grateful!

[wowfudge]

Sorry if I gave the wrong impression. I intend to pay for our removals by credit card to benefit from the extra protection and the credit period. Not because we are strapped for cash.

[insertimaginativeusername]

Have you got a mortgage in principal for the next property?

[thisismypassword]

We've been told by London and country that we can borrow nearly 200k. It's quite a leap from what were on now but we bought at the right time and have better jobs.

The reason I asked about the initial fees is that I will have just come off maternity.

Has anyone dealt with l&c -- do they have form for roping you in with promise of money then back tracking when you go through the process with them?

When you put you house up for sale when is the best time to apply for the mortgage as I know that the offer only lasts 3 to 6 months!

[Crikeyblimey]

I've used L&C several times and found them excellent.

No other advice though, sorry.

[LittleBearPad]

London and country were great for us and friends of ours too.

The solicitor will pay the stamp duty out of the proceeds of sale. They will also retain a portion of sale proceeds to pay their outstanding fees. You will need £500 or so upfront for disbursements.

Depending on where you are in the country (London and similar) you may need to have accepted an offer on your property to be taken seriously by a seller. If this is the case and you want to buy by the end of the year put your property on now.

[LittleBearPad]

Apply for the actual mortgage when you've had a offer accepted. You can get a decision in principle before finding a house. L&C can do this.

[thisismypassword]

What exactly are disbursements? Is it the searches they do before the contracts go through? Can't remember as we moved (first time buy) in 2011.

Does the £500 include a survey or is that separate?

Then there's the removal can.

Hoping all that will be no more than £1000. I'm on maternity for a few more months so we're preparing the house and then putting on the market when I go back to work.

The problem is, and I don't know whether you've found this in your area, but there are hardly any houses available!!

[thisismypassword]

So if L&C say that we can borrow up to 200k it's true???

He didn't want details of the following (and I thought things had gotten stricter):
Husbands pension
Husbands student loan payment
Mobile phone bills
How much we spend on food a month
Car insurance

He just seemed a. It vague --- why wouldn't he be interested in these things?? He just wanted to know credit cards, car finance and a couple of small HPs we've got. It seems a little too good to be true!!

[insertimaginativeusername]

That's all they need to know.

Does the £200k = purchase price or lending amount?

I only ask about MIP as they can factor these figures in for you and solicitor will pay all fees out of the sale.

I've just had mine done and we have deducted enough money from the equity to cover all fees so isn't counted in the deposit for the next mortgage - have you done this?

Also if you are selling you need to consider the conveyancing fees for selling as well as buying.

[insertimaginativeusername]

Surveys etc are additional to the solicitors fees.

Plus there are often separate fees for money laundering verification, fees for electronic payments and for storing an archive of the records.

Currently eyeballing a solicitors quote for sale & purchase

[LittleBearPad]

Disbursements are payments for searches, chaps payments, registering the purchase etc. Basically the out of pocket expenses the solicitor will pay prior to the sale. They will occur on both the sale and purchase.

If the the mortgage will end prior to your retirement then your pension isn't relevant to a lender.