Moving up the property ladder for dummies

[SpadesOfGlory]

Can someone please spell it out for me in simple language how I go about buying a more expensive house? I vaguely know what needs to be done but I don't know what order to see mortgage advisors/hire solicitor/estate agents etc?

I want to sell a house I bought when single, and buy a joint property with my husband. Will it cause difficulties if current mortgage/deeds are in my maiden name and I want to apply in my married name?

We live in a new build house on a small 8 house development in a desirable area..121k left on mortgage and house apparently worth approx 160k. How much actual cash do we need in the bank to buy a house of approximately £235k? Is deposit taken from equity or do we need to stump up the full amount? Is it worth seeing a mortgage advisor before we start anything and get an AIP?

Well done if you made it this far sorry it's so long!

ok so, doesn't matter that current house is in your name, and next one is yours and husbands. as far as I know your name being different now shouldn't matter but don't quote me on that.

if you sell your current house for 160, you would have 39k equity to put towards the next house. that is a 16% odd deposit.

you can use all of this as the deposit, but then you would have to pay estate agents, solicitors, stamp duty etc in cash.

or you could say put down a 10% deposit (from your equity) so 23 and a half grand, and then use the rest to pay fees etc.

I would definitely see an independent mortgage advisor to make sure you can afford and will get accepted for what you want. they can generally talk you through the whole process too.

List your house for sale. You need a buyer before you can proceed realistically (as sale price will determine your budget etc)

Make some assumptions and apply for a mortgage agreement in principle. Either you will take your current mortgage and “top it up” to make a bigger mortgage or you’ll get a new mortgage and your current mortgage will be paid off. Look at the best deals

Your sums should be something like (assuming you have no other savings)

£39k equity

Less £2.2k stamp duty (on 235k purchase)
Less solicitors fees eg £1.5k
Less moving fees eg £1k
Less mortgage fees and surveys eg £2k

So £39k - 6.7k = 32.3k deposit

So you can apply for a mortgage agreement in principle using the 235k valuation and with a 32k deposit (although you’ll need to check the numbers I’ve given you above and add in any other expenditure)

Then once you’ve a mortgage AIP you can start looking at properties to buy

Thanks so much, it really helps to see it set out like that. We have about £20k savings currently but I wouldn't want to spend it all on another house, so I was trying to figure out how much could be paid for using equity and how much we might need up front before sales are finalised.

Our house has a few hairline cracks being a 3 year old new build, we haven't decorated very much and the walls are still mostly magnolia apart from a couple of rooms. Should we fill all the cracks and paint before listing for sale or does stuff like that not put people off because they would usually be decorating anyway? Superficially it all looks lovely and bright and fresh, it's just up close you would notice a few cracks.

Also, what paperwork do I need to have? I'm not actually sure I have much apart from the EPC. I would probably use the same solicitor who dealt with the purchase first time round so presumably they would have some info?

Save now! You will need money to pay for stuff like the deposit, legal fees etc before you get money from the sale of your current house.

OP - I always think it is worthwhile sprucing up a house before sale. Patching up the cracks and a fresh coat of paint mean the buyers don’t see “work needed” if they buy.

I’m not sure you will need much upfront. For example we paid approx £250 solicitors deposit. However estate agent fees, solicitor fees, deposit etc all came from the funds on completion

Ok I'll probably give the place a spruce up then, it's just we both work long hours and don't have an awful lot of spare time to spend decorating!

For those saying we need a buyer for our house first...how long is acceptable to spend looking? Houses don't come up in the area we would like very often and I don't want to feel too rushed when we intend this move to be our forever home.

Save now! You will need money to pay for stuff like the deposit, legal fees etc before you get money from the sale of your current house

you pay your deposit out of the equity in the other house, solicitors fees etc get paid on completion.

only up front costs are likely to be valuation fee, mortgage fee if there is one.

you do not need to save up another deposit pre selling your house, if this was the case hardly anyone would move!

I agree with most other advice here. The first thing to assess is affordability. For that you need an up to date valuation of your current home (in fact, you need at least three, and you need to err on the side of achieving lower rather than higher). This would always be my first step, followed by meeting with my financial adviser. They will then be able to walk you through roughly what you can afford based on the savings you have, the equity in your current house plus your income and expenditures.

Once that is sorted, you really need to get your own house on the market. Most sellers will not accept an offer (or take their own place off the market) unless you have a buyer and are ready to proceed.

You won't need huge amounts up front. Most solicitors take some payment up front, but this is usually a few hundred pounds. You'll also need money to cover things like a survey, removals and any fees from your financial adviser. The main chunk of the solicitors' fees and the estate agent fees can be taken out of the equity, as can the stamp duty on the new place - all provided, of course, that you have enough equity so you'll need to do your sums with your financial adviser.

Only the person at the bottom of the chain needs to lodge deposit money with the solicitor in advance of completion (unless there is discrepancy between the equity in the old place and the deposit for the new). Once exchange happens you are committed to the sale so that money is effectively guaranteed and no need to provide anything more.

My husband and I have just done the same thing that you are considering.

I had no issues selling house in my maiden name but using my married name to buy the new house. None of my banks or ID docs were in my married name as we only started the process a month after getting married. I gave all docs in my maiden name and sent across my marriage certificate and that was enough to proceed with my new surname.

Re equity - apart from a survey fee and a small amount of up-front fee to the solicitor 100% of the deposit & equity I am using for our new house is coming from my sale proceeds less mortgage redemption costs. We have applied for slightly more mortgage than we need so that we get some equity back in cash to cover decoration & new furnishings etc.

To work out what we could afford, as a starting point. I went on a few bank mortgage websites (Barclays, santander etc) and used their ‘what can I borrow’ calculators. Be honest with income & current loans/credit card debits and we found that the answer was very similar to what we got with a broker.

Add the mortgage figure plus your existing equity together and that is a good starting point for your new budget (assuming you are happy to use your savings to cover any stamp duty, legal fees and surveys etc!)

We didn’t need to get a mortgage agreement in principle, but our mortgage broker issued us with a certificate of affordability which basically stated the amount of mortgage we could get so that we could give that to any agents that wanted it.

We did look at properties for sale before ours was listed, but our house was in a very desirable area and was predicted to sell fast. We only had 1 agent that refused to show us a property, all others were fine as we reassured them that we would list as soon as we found a house we were 100% interested in. As it was, we found a house we liked and listed mine next day, but that house then went off the market. We had a proceedavble FTB offer within 5days of listing and the next week found somewhere we also liked.

We only appointed solicitors once our chain was complete, but I did to research on who to appoint before then. The ‘reallymoving’ website came up with good quotes for me, and seemed to have genuine reviews if you are stuck. I went with an ‘online’ solicitor based in Stockport (100s of miles from where we live) and they have been great!

My advice would be to do the math and have a look at properties in your budget. Be upfront with agents and let them know this is what you are doing to see whether it is worthwhile you moving yet.

Best of luck!