Everyone realises that buying a house is quite a large expense; it is, for most of us, the single biggest purchase we will ever make. But not as many people take the time to consider how pricey it can be to sell and move house.
If you are thinking of doing this, here are some factors to think about:
Have you thought about stamp duty? When you move house, you must pay this tax if the property is worth £125,000 or more. As you’d expect, as the price goes up, soo too does the duty. For example, if the house you’re moving into cost £485,000 (about the average in London). The stamp duty is 5%. That’s £24,250. It is worth reassessing your current living situation and sees if you can afford a change like this.
Are you in negative equity? This happens when you owe more on your mortgage than your house is worth. In this case, it may be difficult to sell it for the amount you need to break even. If you are “underwater” in your mortgage, it may make more sense to stay in the house and work down your debt.
Are your finances in order in general? You are in a much better position to buy a house if you are debt free (excluding the mortgage on your first house, which you may be able to port). Lenders will often offer a larger amount if you do not have outstanding bills and credit card debt weighing you down.
You will also need cash to sell your existing house: do you have the funds to spruce up your home? Paint the walls? Make necessary repairs? Increase your curb appeal?
Are you in the right financial position to sell your house? If you are unsure, speak to the estate agents at Doorsteps for advice.