I'm in the middle of filling out documents for our conveyancer and am suddenly in a panic that I've messed everything up and can't actually afford the house I'm buying. Please can someone hold my hand and help guide me through this? I'm thick as shit when it comes to numbers and just need it spelt out like you would to a five year old.
We're selling our house for £338,000.
We're buying a house for £350,000.
We have £35k in the bank.
Now then. I thought this meant our money to spend on a house purchase was:
Value of sale: £338,000, PLUS money in the bank: £35,000. So £373,000 in total.
So £350k house purchase seemed sensible with wiggle room for solicitor's fees, renovations, furniture etc.
HOWEVER.
The £35k in the bank is from raising a mortgage against our current house.
We owned our house outright (inherited it) until recently when we raised a mortgage on it for £40,000. Pretty much all our money was tied up in the house, we're skint otherwise.
We've spent some of the £40k on house renovations but still have £35k left in the bank.
We've checked and can in theory port the mortgage.
So really - does that mean we have £338,000, MINUS £40k mortgage, so £298,000 equity? So really can we only afford to be buying something of equal value to the one we currently own?!
And I've just seen we need to pay a deposit on exchange of contracts. Typically 10%. £35,000. But that wipes out pretty much everything that's in our bank. The money raised from the mortgage.
I just feel like a total idiot. Any help would be really appreciated.