Selling with large equity but little free cash

[Givemethesun]

Hello, how does it work if we want to move location please im terms of what free cash we need as can’t get my head round it. Please use example below

Current position:
House value £1.1m (assume we sell for that)
mortgage £500k
equity £600k

move to:
house value £1.1m
morrgage remains 500k
equity £600k

how much cash do we need? It’s all tied up in the house! We have some free cash obviously but I’m thinking when we exchange contracts how do we pay for the deposit of say 10% (110k) on new place when it will be coming from our equity?

what do we actually need FREE cash for (ie can’t use equity)

• lawyers?
• stamp duty?
• estate agents?
• deposit

Stamp duty will be £51,250 (assuming you live in England).

I don't think you need a deposit if you're selling somewhere.

Estate agents will be £15k-£25k

Removal costs are missing from your list.

Most costs can be paid from equity but only if you have it spare, obviously.

Usually only bottom of the chain pays 10% at exchange, so you shouldn’t need to worry about that. You can pay estate agents, stamp duty and solicitors from equity on completion.

You will need to pay a few hundred upfront to your solicitors for searches, removal costs and any surveys you have done.

Sorry posted before I’d finished my thoughts. So, you don’t need loads of free cash. But your numbers categorically don’t work as you’re not allowing for any costs. You can only keep your house price, mortgage and equity the same if you have liquid cash to cover things like stamp duty, which it sounds like you don’t.

Ah yes of course. Makes sense. Thank you. I don’t know why i find it so confusing!!

You would need about 85k in cash for your stamp duty, estate agent fees, legal fees and removals cost.