Your Guide to Selling and Buying a New Home

This guide aims to break down each step of the process, providing clarity and actionable advice. As experienced mortgage brokers, we have your best interests at heart and will make this journey as smooth as possible.

Your Current Mortgage

Your first step is to understand the state of your current mortgage. Check the balance of your mortgage, and consider any early repayment charges. These charges may apply if you pay off your mortgage before the end of its fixed term and can impact the amount of equity you have for your next home purchase. You may be able to ‘port’ the rate over to the new property (see below).

Estimating Your Equity

Equity is the portion of your property that you truly "own." It's calculated by taking the current sale price of your property and subtracting the outstanding mortgage balance and any selling and buying fees.

To estimate your potential equity after selling your home, you'll need to deduct the mortgage balance, any early repayment charges, estate agents fees, solicitors costs (for selling and buying) as well as stamp duty - see next point.

Costs Involved In Selling Your Home

Selling a home isn't without its costs. These can include:

•  Estate agent fees (usually a percentage of the sale price)
• Solicitor fees for handling the legal aspects
• Lender fees such as early repayment charges.
• Stamp Duty
• Removal costs
• Survey and lender fees for the new property.

If you'd like us to run through all the potential moving costs, calculate your equity and how much you could borrow, call us on 01580 447 447 or complete our contact form below

Porting Your Current Mortgage Rate

Porting a mortgage is the process of transferring your existing mortgage rate to a new property. This option can be beneficial if you have a competitive interest rate on your current mortgage that you'd like to maintain.

However, not all mortgages are portable, and certain criteria must be met. For instance, you'll need to requalify for the mortgage on your new home by fitting the lenders affordability tests, as well as the credit search and score. If you need to ‘top-up’ the new mortgage, that will usually be at whatever rates the lender has available at the time of your application.

Planning Your Budget for the New Purchase

Budgeting for a new home involves more than just the property's purchase price. You'll need to account for moving expenses, renovations or repairs, home insurance, council tax, and possibly higher utility costs. Also, consider how comfortable you are with your projected monthly mortgage payments, given your current income and other expenses.

Working Out How Much You Can Borrow

Your borrowing capacity is how much lenders are willing to lend you for your new home. Factors affecting this include your income, credit score, other financial commitments, and the deposit you can afford.

Lenders also look at your Debt-To-Income ratio (DTI), which measures your total debt in relation to your income. A lower DTI generally increases your borrowing capacity. We use software that checks many lenders affordability calculations because the amount a lender will lend can vary quite a bit

Choosing the Right Estate Agent

The right estate agent can make the home selling and buying process significantly easier. Look for agents with a good track record in your area, positive customer reviews, and a clear communication style that suits you. Consider their fees, but also the value they offer. A good agent can often negotiate a higher selling price or a lower buying price, more than making up for their fee.

The Home Buying Process

Once you've sold your home and worked out your budget, it's time to dive into the home buying process. This involves finding a property, making an offer, negotiating the deal, finalising your mortgage, and closing the deal. Each of these steps can be complex and requires careful consideration. However, a good mortgage broker can guide you through the process and help you secure the best deal.

Applying For Your New Mortgage

The last step in your journey is to apply for your new mortgage. This includes finding out which lender will offer you the very best terms based on your circumstances and requirements. We use all UK lenders and insurers to get the best terms on the mortgage and any associated insurance products you may require.

Conclusion and Help

This guide is designed to help you navigate the exciting yet often complex journey of selling your home and buying a new one. As you embark on this journey, remember that we are here to simplify the process, helping you understand and make the best decisions at every step of the way.

Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage.