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Original poster

Mortgages

10 replies

ccfccci · 27/05/2024 10:22

After some advice please, we have a mortgage on our property for £150000 and are looking to sell for approx £100000 for than our mortgage is. We're looking at a property worth £160000. If we sell for £250000, and buy for £160000, what happens to the £90000 profit we make? Do we get it as cash?
Thanks for any help/advice

OP posts:
ShinyBandana · 27/05/2024 10:25

Are you taking your mortgage with you to the new property?

Bjorkdidit · 27/05/2024 11:19

Yes, you'll get the £90k ish sent to you by your solicitor on the day of completion or shortly afterwards. During the sale, they'll ask you where you want any excess money sent.

When you get the money you should then move it on fairly quickly as most current accounts don't pay interest and instant access accounts pay 5%, which is nearly £100 a week in interest (some of which will be taxable so you need to divide the money up between you and move some of it to ISAs to maximise the allowances used).

Original poster
ccfccci · 27/05/2024 11:36

Thank you for your reply, that's really useful advice

OP posts:
caringcarer · 27/05/2024 12:19

Wouldn't you just have the £90k taken off £160k to lower your mortgage? It would mean you'd pay a lot less interest on your mortgage over time.

Bjorkdidit · 27/05/2024 12:26

Crap, forgot about the new property. Blush

Yes, the £90k goes as a deposit on the new property and the OP will also need a mortgage of around £70k. All the money moving around is done by the lender(s) and the solicitor and you won't see any of it.

mitogoshi · 27/05/2024 12:30

Depends on the mortgage you arrange for the new property. If you take out a mortgage for £100k on the new mortgage, £60k of your equity will be used to buy the new house, the remainder will be returned to you once estate agent and legal fees are deducted, you have to nominate an account to receive the money. Generally mortgage companies will offer better rates at 80% then lower still at 60% mortgage

WelshNerd · 27/05/2024 12:35

If you have a good rate currently might be worth discussing porting your mortgage.

Eggmoobean · 27/05/2024 14:32

Solicitor will move the money between lenders for old house and transfer to new mortgage for new house deposit. You won’t see the cash but it will be transferred between mortgage lenders

INeedToClingToSomething · 27/05/2024 14:57

Bjorkdidit · 27/05/2024 11:19

Yes, you'll get the £90k ish sent to you by your solicitor on the day of completion or shortly afterwards. During the sale, they'll ask you where you want any excess money sent.

When you get the money you should then move it on fairly quickly as most current accounts don't pay interest and instant access accounts pay 5%, which is nearly £100 a week in interest (some of which will be taxable so you need to divide the money up between you and move some of it to ISAs to maximise the allowances used).

In addition to this you only get FSCS for protection on up to £85000 (per person per institution). So if this amount would push you over these limits that's another reason to move it it asap:

www.fscs.org.uk/what-we-cover/banks-building-societies/

Bjorkdidit · 27/05/2024 15:13

You get protection for 6 months (or possibly a year) if you go over the limit due to a house sale.

But the OP won't be seeing that money because when I wrote that post, I forgot to account for the cost of the new house.

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