Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
Legal matters

Mumsnet has not checked the qualifications of anyone posting here. If you have any legal concerns we suggest you consult a solicitor.

Original poster

How does a first time mortgage work

84 replies

adviceonmortgages · 12/04/2022 13:41

I have a mortgage free property that was gifted me. I've never had a mortgage before so am a first time buyer. How do I go about getting a mortgage and selling the current property? Would I be able to use some money of the house sale as a deposit for a new house/mortgage ? All this is new to me don't know how it works !

OP posts:
Endeavormorse · 12/04/2022 13:48

You just sell the house. You’d only need a mortgage if the house you next wanted to buy cost more than what you’ve raised from selling the original house. Does that make sense?

Endeavormorse · 12/04/2022 13:49

If you made £100k selling and wanted to buy for £200k you’d need a mortgage for £100k. As an example.

DaisyDozyDee · 12/04/2022 13:57

If you’re selling a house to fund your purchase, you aren’t a first time buyer. You are only a first time buyer if you’ve never owned a property.

DaisyDozyDee · 12/04/2022 14:01

Sorry, that wasn’t very clear. What I meant is that it’s important not to misrepresent yourself as a first time buyer to estate agents, vendors or mortgage brokers etc.

Aimee1987 · 12/04/2022 14:03

What @DaisyDozyDee said.
Also first time buyer only really counts for stamp duty purposes. As you are moving home you will need to pay full stamp duty.

www.which.co.uk/money/mortgages-and-property/first-time-buyers/buying-a-home/how-to-buy-a-house-alm0r9l4yf5x
I found this guide helpfull when we first started looking. It will talk through all the important steps of buying a house.

Original poster
adviceonmortgages · 12/04/2022 14:04

Sorry should've been more clear we are hoping to get a five bed new build so there will be a considerable difference in terms of the house values. So we will need a mortgage.

OP posts:
Original poster
adviceonmortgages · 12/04/2022 14:05

But surely I am a first time buyer because I have never brought a property. This house was given to me all paid off already

OP posts:
Aimee1987 · 12/04/2022 14:13

A first time buyer is someone who has never previously owned a property. You have. It's irrelevant how you came to own that property.

For what it's worth me and DP got a first time buyer mortgage despite him owning a property previously ( 10 years ago). The only big difference was they would consider us with a

chesirecat99 · 12/04/2022 14:14

@DaisyDozyDee

If you’re selling a house to fund your purchase, you aren’t a first time buyer. You are only a first time buyer if you’ve never owned a property.
Yes, you won't be eligible for any first time buyer schemes because you already own a property, even if you didn't buy it eg you will not be exempt from stamp duty as a first time buyer on a new property.

You also might need tax advice on capital gains tax if you aren't using all the money from the sale to buy a new property and you don't currently live there.

Original poster
adviceonmortgages · 12/04/2022 14:22

It's so confusing to me ! I currently live in the property with my soon to be husband (he has never owned a property) and I want to sell this house to purchase another house with my partner. Am I able to use some of the money off this house for a deposit ? Do I need to sell this house first and then get a new mortgage or can we apply for a mortgage while this house is up for sale ? Sorry it's all new to me and I need ir dummied down for me

OP posts:
TeaStory · 12/04/2022 14:25

Am I able to use some of the money off this house for a deposit ?

Yes.

Do I need to sell this house first and then get a new mortgage or can we apply for a mortgage while this house is up for sale ?

You can buy and sell at the same time (most people do), or you can go into rented for a while between selling your old house and buying your new one.

Aroundtheworldin80moves · 12/04/2022 14:30

You need to get a valuation of current property and see a mortgage broker to find out what mortgage you can get. The price you get for the first property, minus some for stamp duty etc forms the deposit. )plus any other savings you want to use)

VodselForDinner · 12/04/2022 14:31

If you’re not married, please make sure you ring fence the money from the house you inherited.

Original poster
adviceonmortgages · 12/04/2022 14:32

This is one thing I'm thinking as I physically won't have the deposit as cash it'll be tied up in the house still won't it..

OP posts:
Original poster
adviceonmortgages · 12/04/2022 14:34

@VodselForDinner

If you’re not married, please make sure you ring fence the money from the house you inherited.
We will be married by the time we are ready to buy the new house
OP posts:
Aroundtheworldin80moves · 12/04/2022 14:35

Thats what house chains are, a chOn of money moving on completion day!

DropYourSword · 12/04/2022 14:35

@adviceonmortgages

This is one thing I'm thinking as I physically won't have the deposit as cash it'll be tied up in the house still won't it..
Yes. So generally you'd buy in a chain, in that you'd sell yours and buy somewhere else at the same time.
TeaStory · 12/04/2022 14:36

This is one thing I'm thinking as I physically won't have the deposit as cash it'll be tied up in the house still won't it..

That’s normal, though. The deposit flows through the chain on completion day, and only the person at the bottom of the chain is expected to have the cash. I didn’t have 10% deposit when I bought my current house - the cash from the people buying my old house (10% of the price) passed to me, then I passed it on as deposit for my new house - this was agreed in advance. (Obviously the cash was all electronic through solicitors, I didn’t have it in my hands.)

Original poster
adviceonmortgages · 12/04/2022 14:39

Okay. So the potential buyers for my current property would put a deposit down and I could pass that on and use as my deposit? Have I got that right ?!

OP posts:
TeaStory · 12/04/2022 14:41

Yes.

Dearmariacountmein · 12/04/2022 14:41

Correct. But remember you will need funds available for survey, solicitors fees and moving fees.

Original poster
adviceonmortgages · 12/04/2022 14:45

Okay for it thank you. Now, do I approach a financial advisor before I do anything ? Also what if our incomes aren't the best, Does the fact I already have an asset go for me and make it more likely to be accepted ?

OP posts:
Oizys · 12/04/2022 14:50

How much is your current house worth? You could make an estimated guess by seeing how much similar or ones are selling for (look on zoopla or right move) if you’ve got no mortgage it’s likely you’ll have a sizeable deposited if you can use all the money the house is worth which would reduce the amount of mortgage you need which could make it easier more affordable to get one

a mortgage depends on your ability to pay it back. They typically lend you a certain amount times your salary so the bigger the deposits the less you need to borrow

Original poster
adviceonmortgages · 12/04/2022 14:54

4 years ago it was valued at £155k but we've had an extension added on since then and a new garden etc, does this add much to value of property? A house behind us (Same size and layout but without a driveway ) went up for 200k last year

OP posts:
Ted27 · 12/04/2022 14:54

No that's not correct. You would be far better off going to a mortgage advisor and have it explained to you properly.