Moving - equity and cash needed

[Peanutbutteryday]

Hi - we’d like to move in London so numbers are quite big. Struggling to understand when we need cash available or when we can use equity.

undestand we will need to pay for: legal fees, estate agent fees, moving costs and SD. SD will cost c £50k. I’ve budgeted £20k for the rest. We have more than enough equity to cover the £70k, but we don’t have £70k of cash available in the bank atm.

how do we pay for fees? Or do we need some cash now for legal fees but will then be ok to use cash from equity on sale for SD as we pay that after move?

What will you be using as a deposit?

Oh yes didn’t think of that. Do you usually have to pay deposit in advance of sale too?

Basically our current property is worth £1.1m Will be moving to another property in region of c £1m. Mortgage currently £600k so equity £500k.

free cash we have outside of isas and pensions is limited although probably could scrape some together if it was to Bridge a small time gap

If you a buying a property of similar value to the one you are selling you can use the deposit you receive for your sale as the deposit for the purchase, so you don't need to come up with any actual cash.

Thanks - does the deposit get paid on completion date or exchange? As we won’t have much cash until completion. Can’t get my head around it 🙈

The deposit is 'paid' at exchange, but if you're selling at £1m, and buying at £1m, you won't need any cash, you'll just use the money from your buyer as deposit for the property you're purchasing.

Typically 10% on exchange (although not infrequently 5% these days) then the balance on completion day.

Ah yes I see. So effectively we’d need to receive our buyers deposit on day of exchange and then forward on to our vendor for our deposit that same day. Thank you very much.

Essentially yes, your conveyancer will handle it all, so you don't really need to do anything yourself.

Thanks, really helpful. Thanks for taking the time to reply

Yes so IME the deposit works its way along the chain as long as you are selling a property too- so your buyers deposit goes straight to the person you’re buying from. Only issue is that if the house is worth more you might have less than 10% so you need to make sure your seller will accept this.

I think last time I bought most of the other stuff was paid post-completion, so stamp duty and solicitors/ estate agents costs came out of the completion funds. Obviously you still need to make sure you can cover them when you work out your mortgage but you don’t pay them up front.

I think that the only things I paid out for in advance were search fees and we also paid our removals/ storage costs as well because we had a bit of a gap in the chain.