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How Does A Mortgage Work When Selling A Property?

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JBW1366 | 15:49 Thu 09th May 2024 | Business & Finance
11 Answers

Good Afternoon

I have only ever brought one house in my life (my current abode) but wanted to know how buying and selling works - in plain English please.

 

I brought my current house for £240,000 with a £35,000 mortgage - I have £20976.36 outstanding! I have put my house on the market at £300,000 and made an offer on a house at £300,000 - surely I will be mortgage free? or am I missing something. sorry for a question you might think is silly but if you have never done this before - how am i supposed to know. 

Thanks in advance for help

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The proceeds from the sale of your house if you get 300k will be 279k after the mortgage is repaid.If you intent to buy a 300k house you will be 21k short, you will also have all the exes including stamp duty at 5% on the 50k above 300k.
16:01 Thu 09th May 2024

You also need to factor in other expenses such as stamp duty and solicitor's fees.

When you sell your house your mortgage must be paid off and the conveyancer or solicitor will ensure that is done before you get the proceeds.  You will be £29k short on the price of your next house

Apologies for the typo.  You will be approximately £21k short of the cost of your next house.

The proceeds from the sale of your house if you get 300k will be 279k after the mortgage is repaid.

If you intent to buy a 300k house you will be 21k short, you will also have all the exes including stamp duty at 5% on the 50k above 300k.

Question Author

Thanks Barry1010 so I expect my mortgage provider just transfer the mortgage over to the new property? 

no you will need to redeem your current mortgage then negotiate a new one with this or another lender. Mortgages are not transferred.

Toratoratora is correct, you will have to have a new mortgage ready to go when you sign for the new house.

You really need to start sorting that out now

To be mortgage free you need to find a property for approx £260,000. That way the £300k from the sale of your house pays the mortgage off, pays for the new house and gives you enough left for legal and moving expenses.

Thanks for the BA.

It does depend on what sort of mortgage you have. I took mine between properties. I didn't have to negotiate a new mortgage but redeem the existing one. I did have to increase it tho

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