House Equity Question

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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

Most lenders assume a certain spend on food, mobiles, etc etc and deduct a percentage from your income.

We have just moved and our upfront payments were:

Reservation fee as it is a new build
Survey
Removals
£300 had to be put on account at the solicitors for searches etc

Everything else was paid for as part of the selling and buying transaction. the deposit our buyer paid was sent up the chain to the builder we were buying from.

I would be careful about paying for things on a credit card once you had your mortgage offer. I think generally it's advised not to use more credit which may then affect affordability.

So laflottes did you pay stamp duty and other final costs with some of your equity and put the rest of the equity towards your next house?

Everyone's input has been so helpful!! I didn't expect this so thanks.

I don't really understand the bit about your buyer's deposit, sorry.

Hi - it's all very confusing isn't it!

So basically yes, we paid stamp duty and other final costs such as the commission to the estate agent, remainder of the solicitors fees out of the equity. The solicitor worked out the amounts and paid it all on our behalf and then there was a little bit left over that was paid back to us.

Regarding the buyer's deposit...so they paid a 10% deposit on exchange to us (well to our solicitor as they handle it), we then had to pay a 10% deposit to the person we were buying from (in our case, the builder). So the 10% our buyer had paid us, went to the builder as our deposit.

Also worth noting, is that 10% of the house we were selling, was less than 10% of the house we were buying. Our solicitor agreed with the builder that we could just send them the amount we got from our buyer, rather than the full 10% deposit. Apparently this is pretty common but worth mentioning to your solicitor in advance.

We were exactly like you, in that we had a fair bit of equity, but not a huge amount of savings therefore everything that could be done out of the proceeds of the house, was done that way.

I would estimate £300 for solicitor, £500 for survey, £200 for removal van. So if you have £1k, it should all be fine!

If you think of anything else, just ask as it's all quite fresh in my mind!

The contract will set out the deposit, usually 10% of the purchase price.

If you fail to complete after exchanging contracts you will owe the seller this money.

Assuming that as you go up the chain the purchase prices increase as people trade up this means each level of the chain is responsible for paying a bigger deposit to their seller's solicitors.

Ie first time buyers paying £100k have to pay a deposit of £10k at exchange.
The people they are buying from are themselves buying a property for £150k and therefore owe £15k for their deposit.

However for practical purposes it is usually/often agreed that the cash deposit from the person at the bottom of the chain ie £10k will be passed up the chain abs therefore that the second lot of buyers will not actually have to send a further £5k to their solicitors unless completion fails to happen when they are liable.

I hope that makes sense

Kind of makes sense! I guess I'll learn this all first hand. Hopefully putting house up for sale in July - wish me luck! I might have to revive this thread later as it's such a minefield!!

Get yourself a decent solicitor by asking your friends, family and particularly the estate agent for recommendations. It makes the process a little less painful. Good luck