Does this property move make good financial sense?

[TheBreastmilksOnMe]

Ok mumsnetters can you help me work this out? We bought our home 6 years ago and paid £121,000 for it, it was on sale for £125,000. We paid £10,000 deposit so took out a mortgage of £111,000.

Fast forward to today, the property next door sold for £112,000 so we know with the recession how much value we've lost and we are guessing this is how much our property would sell for.

There is a house in the next street which is of similar size to ours but they have converted the attic into two extra bedrooms plus the bedrooms are a bit bigger anyway and it's going for £105, 000 so im guessing would perhaps sell for £95,000?.

Without any money to put towards anything how would we buy this house? By selling ours would we be left with anything? How much after fees etc? I cant work it out in my head or whether it would be even worth it? But it's got extra bedrooms! Help me work it out please!

Firstly, how much have you paid off on your mortgage? Not much, but over 6 years it might be enough to make a difference.

I really dont know Soloman as dp does the admin in this house and he's not in to ask yet but we pay around £550 a month part interest part mortgage if that helps?

Soloman is right - you need to know the balance on your mortgage really.

You wouldn't have to pay stamp duty on the new house as it's below the £125k threshold but you would need to pay solicitor's fees, estate agent fees (here they charge 1% plus an upfront charge for producing the marketing stuff) and of course removals if you need them.

The other question I would be asking is why is this other house priced more cheaply than yours if it has more room?

It makes a big difference in this case, I think. You need to have at least five per cent deposit for the next property, preferably ten. If you've paid off £10k of your mortgage, you have that. You'll then need estate agent fees, solicitor fees and moving costs. I'd guess at around £2k total for that. So if the amount outstanding on your mortgage is £100k, you can do that. If it's £105k, you might be able to get a 95% mortgage. That assumes you can get exactly the same price as next door.

Why is the next road so much cheaper?

Ok thanks. I honestly dont know, maybe we have a larger garden? I havnt been to see it ive only looked on the website. We do have a bigger garden then most where we live.

OP do you know your interest rate and how long the mortgage term is? I can estimate the amount left on the mortgage from that.

I will have to wait till dp gets home in a bit to ask i know we were at a fixed rate for 5yrs then dropped to a lower rate last year. I'll find out.

£101,000 is what's left.

Couldn't you convert your attic?

We dont have 2p to rub together!

It is maybe doable then, though very tight. You could put your house on with a no sale no fee agent and see what happens?

So if you sell your house for £112,000, minus 1% fees and conservative moving / conveyancing costs of £1,000 you will have £110,000.

Settling with your mortgage company gives you £9,000 left (assuming no early redemption fees). Realistically you would want to set aside at least £1,000 contingency/redecoration etc.

So buying a house at £95,000 gives you a £87,000 mortgage and £8,000 deposit.

Can you work out what the repayment would be on that (over the same term) compared to your existing mortgage?

Yes that makes sense thank you. Do people normally buy a house cheaper than their current property? Is it the wrong way down the property ladder!

I'm suspicious as to why this property is larger than yours but worth less. There must be a reason