Can someone explain simply how I would sell and buy a house

[mortgagenewtome]

I have a house owned outright because it was gifted to me, therefore I've never had a mortgage but am not classed as a first time buyer (I don't think)
We'll need to move in a couple of years due to space, I don't know how it works !!

Do we need to put this house up for sale, then try and get a mortgage and then start looking for a house to buy?
What if we find somewhere and we want to make an offer but our house isn't sold by then?
Also, how does it work with a mortgage when your deposit will be the sale of current home?

Thanks

Have a read of this for starters, it's very helpful.

www.which.co.uk/money/mortgages-and-property/first-time-buyers/buying-a-home/how-to-buy-a-house-a8zHm0a1JZsP

(I know it says first time buyers, but I take that as inexperienced rather than technically not first time)

See a mortgage advisor first to get a "mortgage in principle" and to find out what you can afford. Put your house on the market (best to do this before viewing so you will be taken seriously as buyers). Once you get an offer on your property that you are willing to accept, you will then be in a position to put in an offer on a house you like. Ideally, this is the best order of things, but obviously you may find your dream house before you have a buyer for yours. And that's when the stress starts!!! Regarding the deposit, you will get 10% of the sale price from your buyer. If you are buying for more than you are selling, you may need to top up the deposit so you can give 10% of what you are buying. Eg. If you sell for 300k you will get 30k deposit for yours. If you buy for 400k you will need to find the extra 10k for your deposit. Hope that makes sense!

Do we need to put this house up for sale, then try and get a mortgage and then start looking for a house to buy?
get a mortgage agreement in principle first so you know what your budget is, put house on market, find another house to buy, find buyer for your house (the last two can be vv)….then formally apply for mortgage

What if we find somewhere and we want to make an offer but our house isn't sold by then?
you make an offer anyway they may accept it but if your own house is under offer you’ll be in a stronger position

Also, how does it work with a mortgage when your deposit will be the sale of current home?
we did this last year is fine, the mortgage lenders wont let the solicitor release funds until your house is sold, usually an hour or two before you formally buy on the same day

Thank you !!

We already have 18k saved towards a deposit, how would that work with the 200 of current house sale ? Would it just be put down as one big deposit ?

Also does anyone know with a deposit of that much what kind of price range we could be in ? I don't want to use the online calculators yet as I'll get bombarded

Yes that would be one big deposit. As for what price range you're in for buying that depends on your salary - 3 or 4 times your annual salary would probably be the right ballpark.

Sorry the 3 or 4 times salary would be the mortgage you'd be likely to be offered, so add that to the £218k deposit you'll have.

Don't forget that if you need to pay stamp duty when you purchase, you can't add that to the mortgage. There are also solicitor's fees and search costs for your purchase, and solicitor's and estate agent's fees for your sale.

As titchy says it depends on salary. If you earned say £40k between the two of you you might borrow, say, 3 times that (possibly more might be allowed) so first work that out. Eg that would mean £120,000 mortgage, £200,000 from sale of the house (assuming you don't have to pay capital gains tax on it) and your £18k savings. That would be about a £330k house you would be buying. You would need to work out the stamp duty on a £330k house using the balance of your savings for that and a solicitor for the sale and for the purchase and also have to pay the estate agent for sale of your house so your £18k will not all be going into the next house - it will be helping fund all those expenses.

So 1. get the mortgage sorted out in principle 2. look at places you might buy 3. consider if you might want to sell, moving into rented or with family and then look OR do the sale and purchase together OR buy before you sell using a bridging loan - the latter is risky.

Start by getting a couple of estate agents in to give an opinion of your current house's value, how easy it would be to sell, and if there are any problems which might hold it back which you could reasonably fix (extremely scruffy garden for example).

Because you're going to have a big deposit the banks will offer you a more generous mortgage to income ratio than they would if you had a standard 10%, but think carefully about whether you want to go with their maximum - think about the expenses of moving house and whether your income is more likely to increase or decrease in the next five to ten years. Don't forget stamp duty.