How Does A Mortgage Work When Selling A Property?

[JBW1366]

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

[Omg21]

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

[barry1010]

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

[barry1010]

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

[ToraToraTora]

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.

[JBW1366]

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

[ToraToraTora]

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

[barry1010]

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

[Maydup]

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.

[ToraToraTora]

Thanks for the BA.

[bednobs]

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