So you bought your first-home and made it onto the property ladder, but what happens when you’re ready to move on? Perhaps you need more space for a growing family or are looking at a change in location. Deciding to buy your next home can be exciting. However, if you have a property to sell and a mortgage to manage, the process can get more complicated.
Here is a step-by-step guide to help you understand the process of selling your current home and buying your next one.
Look at your mortgage and financial situation.
Before you start looking at properties make sure you have looked into your finances and your current mortgage. Talk to your lender to find out how much you still owe on your mortgage. Ask if you can transfer your mortgage to a new property or if there are any early repayment fees, if you want to switch deals or pay it off.
This information will show you how much equity you have in your home. Equity is the difference between the market value and the mortgage balance.
It is important to check your Stamp Duty Land Tax (SDLT) payment for the new property. The rate you pay will be different from that of a first-time buyer. It is based on the value of the property you are buying.
Get an up-to-date property valuation
To understand how much you can afford to spend on your next home you will need to get your current property valued. Property valuations are usually conducted by estate agents. It is generally considered a good idea to get valuations from at least three estate agents. This will help you see what your home might be worth.
This process will help you to decide what price your house should be on the market for and which estate agents to use to help you with the sale.
Should you consider selling your house first?
If you can sell your property and rent for a while or stay with family, you will be a stronger buyer. This means you can look for properties without being in a chain.
Many people prefer to wait until they have a buyer for their current home before they make an offer on a new one. The downside is that you might find yourself stuck in a property chain. This can make the process longer and more complicated, as your move depends on other parties completing their transactions simultaneously with yours.
Organising yourself to sell your home.
When you sell, you need to give buyers several documents. Gathering these together early will help you avoid delays later. These documents include:
- Property Title Documents
- Energy Performance Certificate (EPC)
- Warranties and guarantees
- FENSA certificates for windows and doors
- Boiler safety certificate
- Electrical installation certificate.
If you are selling a Leasehold home, you need to provide extra information. This includes service charges, ground rent, building management details, and plans for major work on the building.
Get your home ready for viewings. Start by decluttering and freshen up the rooms with neutral paint. Also, tidy up outside spaces to improve curb appeal.
Start your property search
Once you have finalised your budget you can start the exciting process of looking for your new home. Make sure you know what you want.
Think about the number of bedrooms and outside space. Consider if you need to be near schools or want a space to work from home. This will help when you begin to line up properties to view.
Having your home on the market and your finances organised will make you a more attractive buyer when you do make an offer.
Arranging your new mortgage
If your current mortgage is portable, you may transfer it to your new property. However, your lender will need to check your affordability.
However, if this is not an option or if you are switching lenders you will need to apply for a new mortgage. This is a great time to check mortgage rates. You can see how much you could borrow based on your income and deposit. You might be able to borrow more at better rates than your last mortgage.
The deposit in this situation will usually come from the equity released after selling your property, however you can also use savings if you wish.
Make an offer and instruct your conveyancer
Once you have found the home you want you will make an offer via the estate agent. This is also the perfect time to instruct your conveyancer, however you can do this and have them lined up ready to go even before you have made an offer.
Your conveyancer will handle the legal aspects of selling your current home and buying a new one. This includes contracts, searches, and transferring funds. They will keep you informed of progress and help to ensure both your sale and purchase transactions go smoothly.
Exchange and complete
You should aim to exchange on your new home on the same day you exchange with your buyer. This is when your transaction becomes legally binding. If you are in a chain everyone needs to be ready to complete these steps at the same time.
On the day of completion any remaining funds will be transferred, your old mortgage will be settled and you will be able to collect the keys to your new home.
Remember, you must be fully moved out of the home you are selling by the agreed completion day. Your buyers will be collecting their keys and moving in as well.
Moving day
Ideally you will be able to move out of your old home and straight into your new one without the need for any temporary accommodation in between. It is a good idea to have backup plans ready. This helps in case there are delays with your transactions.
The process of selling your current home and moving onto the next can feel daunting with more to manage than when you were a first-time buyer. Choosing a trustworthy conveyancer can reduce your stress. They will manage the legal details, give you advice, and communicate with others involved.
