Trading up

K

kasko

Registered User
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75
Hi,


could anyone tell me how trading-up works?
I am buying a house for 317k, and selling my own for 315 with the outstanding mortgage of 240k. That should leave me with 75k (excluding estate agent and legal fees).

Once I get 315k for the sale, do I settle my current mortgage and then apply for new one of 250k or whatever it is?
Or do I actually use the money from sale plus few thousands from the bank to purchase the new house?

Thanks
 
Sell one house. Move out. Solicitor gets money and discharges your mortgage. Takes fees. You pay auctioneer and you get the balance. You now have no mortgage and no where to live.

Do your sums. With what you have how much do you need to borrow to buy the new house? Apply for mortgage. Pay deposit and sign Contracts. Complete deal by paying over the balance on the closing date which will include your new mortgage which you applied for much earlier.

You now have your new house and your new mortgage.

The big thrill is trying to do these two transactions simultanaeously. This is not fun as you don't have the funds to buy the new house until you sell the old unless you can get bridging finance.

mf
 
I did the same thing in January, I just rang my current mortgage provider and they did all the maths for me. We sold and bought the same day so although we had arranged bridging finance we never actually used it.

It's easy to arrange that nowadays though, apparently in the past it was a nightmare.

Basically the cheque for the sale is received and lodged and then the bank issues the cheque for the purchase.

Your mortgage adviser will figure out taking all costs into consideration how much you now need to borrow.

I will give one word of advise, leave yourself about 5K leeway as unexpected charges do arise, and it is handy to know you have that cushion in case of emergency. If you don't need it you can always pay it straight off the mortgage.

Good luck.
 
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