I want to move to a bigger place but don't know if it's the right time, or whether it's possible atm

[notnowbernard]

We need more space and will definitely need to move at some point in the future

But I don't know whether now is a good time or not

DP earns considerably less than when we first got a mortgage 4 yrs ago, but we are managing our mortgage payments alright atm and his earnings are gradually increasing (own business) Would this affect us getting a bigger place?

Our current place will definitely have increased in value even in the current climate, as we got it in shit condition and have improved it considerably

Is now the right to consider a move? I am clueless about all things property market and finance related And am not sure DP is much better...

Any thoughts much appreciated

[Tinker]

Can you extend the current place? Do you like the area?

[notnowbernard]

Love the area and want to stay here

No option to extend

It's a 2 bed flat

[wombleprincess]

sorry to put a damper on things but your mortgage payment record isnt usually used as indicative of the level of mortgage you can get.

If you move i am presuming you will need a larger mortgage whcich may be tricky if DH's business related earnings arent equivalent to what you need to borrow? iyswim.

[KathyBrown]

Has your equity increased ? Now might be great time to move if you have a good deposit and are moving to a cheaper area you may not need as bigger mortgage as you have right now. You need to see a IFA

[notnowbernard]

Womble - don't worry about the negatives, I like to know the reality of a situation! Yes I have wondered if DP's earnings would affect us borrowing more

Someone told me that self-employed people or those that own their own business etc can do a 'self-cert' thing. What does this mean and would it be an option for us?

[notnowbernard]

We don't have savings

By equity do you mean is the flat worth more than we bought it for?

[KathyBrown]

Self certing was an option a few years ago but that might create a worse senario for you now DP's income has dropped.
The equity is the difference between what you bought it for and what it'll sell for now, so using that as a down payment how much would you need to borrow ? Ideally you wouldn't want to go over 75%

[wombleprincess]

self cert probably a bit tricky at the moment.

equity is the remaing value of property after you have paid of any debts secured on it e.g your mortgage. that could give you a good deposit BUT you will need money upfront - typically 5% of the cost of your new property when you exchange which normally happens a few weeks before you complete (sorry if i am teaching you to suck eggs on this!).

on top of that you will need to factor in other costs that may eat in to your equity, ie stamp duty, solicitor costs etc, as you dont have any savings.

[notnowbernard]

Kathy, we bought it for 150 and I reckon it would value between 180 (would be a bargain) to 215 (would be fantastic if it were valued at that)

This is based on what similar properties are on for in this area

What does this mean wrt what you talked about in your last post?

Thanks for helping, btw

[KathyBrown]

That's it, so what would the house you'd want to move to cost roughly ?

[notnowbernard]

Thanks also to Womble

WHy is self-cert not a good option these days then?

We'd be looking for either a 3-bed place or a 2-bed with potential to create 3rd bed

There's a 3-bed in my road on for 250 atm

[KathyBrown]

Ok so to buy a £250k house you would need to put down between £62,500 (25%) and best case £25,000 (10%).
So in the worse case yours sells for £180,000 with EA fees and stamp duty it's tight but with a bit of extra saving doable providing your Dh earns around the £45,000 mark, (4 times his salary).

[notnowbernard]

Oh Dear

That sounds completely unattainable atm

[Fizzylemonade]

First thing to do is to get your place valued then you can start to work out whether or not you can make the next move. Get at least 2 preferably 3 estate agents in to value it.

Also, if your children are in school then moving area is probably not an option, if they aren't then you could move to a cheaper area travelling to work permitting.

4 times your DH's salary sounds like the most you would be able to get on a mortgage. How long has his business been running? Mortgage lenders usually want to see 3 years worth of accounts.

[notnowbernard]

DP's business will have been running 3yrs next Jan

So will we actually need, say, 45,000 to put down or is this what equity means? (ie if we sold for 200 would have made 50,000 on it)

God I am so clueless wrt these matters

[KathyBrown]

Yes equity is the cash you'll have available to you after you've sold your house and paid the estate agents (about 1.5% plus VAT) and paid the stamp duty on the next house.

[wombleprincess]

sorry, i possibly misphrased. self cert is still possible, but few lenders offer them, and often they are at higher rates that normal mortgages, and may now be more difficult to get.

Has your husband been taking a salary?

ok so you sell for 200, your mortgage is 150, and you have to pay 5 in fees, solicitor etc. the equity you have is 45k.

if you want to buy a house for 250, then stamp duty would be eg 2.5. solicitors fees would be 1, moving costs you .5. therefore you have to find say 254 to actually buy it.

if you have made 45k on the last house, you will need a mortagage of 209. so you will need to prove a salary/earnings of roughtly 52.5k to afford to borrow 209.