Buying a house

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Hi,

We are looking to move house but due to a very competitive market we are looking to do things in the wrong way.

We are putting our house on the market later this week. We have also seen a house we really like and we are considering putting an offer in.

So question; how does arranging a decision in principle work if you don't know the final sales value of your home when you are porting your mortgage?

Can we assume lowest valuation and borrow more and then reduce the decision in principleprinciple?

Can we even arrange a DIP at this point in time?
 

vickster

Legendary Member
I would think you'll get an agreement on the highest amount you can borrow based on your salaries, savings etc and finalise when you know how much you need (you may need extra for costs, stamp duty etc)

I'd think the lender would be best placed to advise
 

Cycleops

Legendary Member
Location
Accra, Ghana
If you are buying the new house before selling the old one, if I understand what you are saying correctly, you will need a bridging loan. Rates are cheap now but if your takes long to sell it might get expensive.

You don't actually 'port' your mortgage you take out a new one. Shop around for the best deal. Talk to a lender or a conveyancing expert about the procedure.
 
OP
OP
bikingdad90
Yes @Cycleops your spot on regarding the situation.

We have no worries that ours will not sell quick. Our type of plots are generally selling within a week and after 1st viewings, occasionally even over the asking price as 10-11 people are coming through the door in a single day and then competing to secure, hence our unusual ambitious style.

Our property is in a desirable area and will be priced competitively but not too aggressively to hinder us when it goes on the market next week. We are actively looking so hoping that will also go on our favour.
 

Sandra6

Veteran
Location
Cumbria
We got an agreement in principal before our house even sold - they worked it out on what we could afford if we didn't sell and had to rent ours out, which pretty much cancels out the existing mortgage.
It's probably best to look at worst case scenario and then you won't be disappointed.
 

Pale Rider

Legendary Member
Be very wary of bridging finance.

Very easy to be tempted to secure that 'forever house', particularly if there's pressure from other people in your household.

But even with low interest rates bridging loans quickly get expensive if the period is longer than you plan for.
 

Cycleops

Legendary Member
Location
Accra, Ghana
We got an agreement in principal before our house even sold - they worked it out on what we could afford if we didn't sell and had to rent ours out, which pretty much cancels out the existing mortgage.
.
Be aware that if rent your house out it is considered income and you could be liable for tax.
 

vickster

Legendary Member
And capital gains tax if the value increases while rented
 

Crankarm

Guru
Location
Nr Cambridge
And capital gains tax if the value increases while rented

I didn't think you paid CGT on your main residence? It would still be your main residence even if renting for a short period? But a specialist such as an accountant would be able to advise more fully and correctly.
 

Brains

Legendary Member
Location
Greenwich
I didn't think you paid CGT on your main residence? It would still be your main residence even if renting for a short period? But a specialist such as an accountant would be able to advise more fully and correctly.
You can only have one of your properties s the 'principal' recidence
If you move between them the CGT will be charged on the one you sell if you have been in residence less than 7 years.
Basically you want your most valuable property to be your official residence and other properties to be rented out, even if you actually live in one

However if you are not married, then it can be possible for you each to have a principal residence, but unless you are both in top tax payer salary level jobs it potentially gets very murky ........
 
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