What can I afford?

[OhHelloNewbie]

Okay, I realise this probably stupid but since we are anonymous here I have no shame in admitting I don't understand how to sell and buy a house when it comes to the financials.

So:
Our house: bought for 97500 (195k whole, Shared ownership) will likely sell for 210 -nearly 7.5k 'profit' for us.

We owe 84k on mortgage.

Can get mortgage for 225k, altho I think we could get more in 6 months for various reasons.

If we were to sell now, what price bracket should I be looking for new houses?

I appreciate it's all nominal figures, but we would like to move area to be closer to family sooner rather than later, possibly have another child if we can upsize at all.

Thanks!

In theory, you're looking to buy a property at around 230k ..... being your 224k mortgage plus 7.5k profit.

There's a couple of provisos there ....

• assumes 7.5k is what you make once the mortgage and shared ownership agreement is settled.
• you have no other savings to add to your 7.5 k deposit

However, that means you've go a 97% LTV (loan to value) .... I.e. the 7.5k cash relative to purchase price of 230k. Your mortgage provider will likely specify a minimum LTV . So if they said you needed say a 10% deposit, such that 224k makes up 90% of the house purchase price, you'd either need to find another 15k or so. So that your ratio is 10% cash and 90% deposit.

The above sums also make no allowances for costs involved in buying & selling. You'd need to account for them somehow.

Nope no other savings as they've all gone into making this house bareavle to live in. Was an absolute dump. Ideally we would argue our case for improvements made and claim more than 50%split of increase in value but to be safe I'm assuming only 7.5k.

So I think really the answer is no. We cant afford to move (could just about scrape together stamp duty/sol fees and moving taking on extra work for a 230 house but ltv is going to be an issue isn't it so I think it looks more likely we should just buy the other 50% and stay put

(Also.. thank you!)

Check the mortgage offer first .... does it specify a LTV amount.
If it was 100% (unlikely), that's a whole different situation from 75%.

Otherwise, the 7.5k cash profit is very unlikely to be enough to cover deposit & all fees.

Is a 100% mortgage a possibility? Not offering any advice on whether that's a good idea or not. But it may be an option. Equally so might buying the remaining shared ownership %, if that would set you up for a few years time.

I didn't think 100% mortgages existed? I am self employed so I expect that rules us our even if they did (hence thinking we might qualify for a higher mortgage in 6 months.. childcare fees go.. another year complete books in April and will pay off our overdraft )

Would you mind pointing me in direction of these 100% mortgages so I can scope it out?

Surely it would be 21000 you'd get out of your current house sale? 7,500 is just the extra profit, the rest would be the original deposit and equity you've paid off.
50% of 210000 = 105000 - 84000

I don't know enough about shared ownerships, hence just saying settling that agreement first. But yes, on the face of it, if selling for 210k, OP "gets" 105k, settles 84k mortgage then that leaves 21k "cash". But that assumes 50% shared ownership and no other fees or costs on settling the shared ownership arrangement.

There aren't many 100% mortgages, and those there are will often have certain criteria ..... the comparison websites will point you to some.

Okay so yes this is the bit that trips me up.. obviously we put down 10% when we bought and have been paying mortgage (albeit rather insignificant amount in grand scheme of things) for the short time we've owned it. So presumably that amount we've paid off is money to move forward with?

No fees in leaving our shared ownership 'deal' it's a straight forward sale, once we have a buyer. We completed in 8 weeks when we bought so although it can be irritating and slower having a 3rd party (the HA who own the other half) involved rather than just seller-buyer it's not excessively so. Mortgage fixed rate is up and we are onto a tracker now to keep our options open while we decide what to do.

It was hell trying to get to the front of the que for our property, and we've improved it SO much, I don't think.. especially given how hard it is for FTB to afford anything decent, we'd have any trouble selling although let's not jynx things!

I make the deposit 21k... so I would look at properties up to 250k as you could pay 245k

Thanks all. This is a game changer for us.

If you wouldn't mind, can I ask a further question?

If we stayed here, we want to do considerable works to make it what we need (after buying the remaining share of course)

Are we able to ask for more on our mortgage to complete the works or will we need to go down the personal loan route, Do you think?