Buying a house help

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Anonymous370
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#1
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#1
Hi,

Say if you buy a flat (through shared ownership) and put down a £20k deposit, then if you decide to "upgrade" to a 2 bed one latter on, say after a year or two, then is it right to say remortgaging is what needs to be done? Selling the house/mortgage and then getting a new mortgage for the 2 bed one?
Also,what happens to the 20k deposit ? Is it like gone for good in a sense or transferred in some way or another?:confused:

Thanks
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martin7
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#2
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#2
(Original post by Anonymous370)
Hi,

Say if you buy a flat (through shared ownership) and put down a £20k deposit, then if you decide to "upgrade" to a 2 bed one latter on, say after a year or two, then is it right to say remortgaging is what needs to be done? Selling the house/mortgage and then getting a new mortgage for the 2 bed one?
Remortgaging is when you take out a new mortgage on a property on which you already have a mortgage. The most common scenario is where you have a mortgage with a fixed-rate for a fixed period (say, for 5 years) and at the end of that period the rate increases. You might look to take out a new mortgage (i.e. "remortgage" if you can find a new mortgage that's cheaper. Sometimes you might do this if you need to borrow some extra money for things like a new kitchen or having an extension built. A remortgage is a mortgage on the same property.

If you're moving house, then you're not remortgaging. What happens with a house move is that when someone buys your current house, they pay for it. You use the money they pay to pay off your existing mortgage. You then use the left-over money from that, and the new mortgage on the new property to pay for the new property.

In practice, your solicitors will deal with the money side (i.e. paying off the old mortgage and using the money from the sale plus the new mortgage to pay for the new house), so what really happens is mostly invisible to you.

Also,what happens to the 20k deposit ? Is it like gone for good in a sense or transferred in some way or another?:confused:
The deposit was used as part payment when you bought your flat. You get it back as part of the proceeds of sale, and then it gets used towards paying for the new property.
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Anonymous370
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#3
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(Original post by martin7)
X
Nice and insightful explanation , thank you!

One more thing, utilities like gas and water, do they need to be paid for as early as before I even step into the flat I'm buying (which is newly built) for them to actually work out with the water and heat? Does council tax need to be paid for as early as I step into the new flat? I guess so as it's the move in date. Broadband is another utility I'll need to get sorted, thinking of going for Hyperoptic which looks blazingly fast and impressive. Any other utilities?

Also, a credit card balance ends up giving a bad credit history in which case exactly? New to them here, only getting them as a safety net, just in case, so interested in getting to know them as well as ensuring I don't get a bad credit history of I do end up potentially using them only I have to. Does the balance on the credit card itself from its first month of appearing to the next cause bad credit history as it's past the one month point? I take it this may not apply for like the Barclaycard which I think copes with 20 months or so of such or without any interest at all if I'm not mistaken.

With overdraft, how long is someone allowed to be in overdraft for until they got some sort of problem ? Is it one month from the date they've entered the red, the overdraft facility, and then maybe their bank just stops their bank account totally or something? What if they stayed within their agreed overdraft limit, even if stretched to going beyond a month perhaps?

Thanks again
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martin7
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(Original post by Anonymous370)
Nice and insightful explanation , thank you!

One more thing, utilities like gas and water, do they need to be paid for as early as before I even step into the flat I'm buying (which is newly built) for them to actually work out with the water and heat? Does council tax need to be paid for as early as I step into the new flat? I guess so as it's the move in date. Broadband is another utility I'll need to get sorted, thinking of going for Hyperoptic which looks blazingly fast and impressive. Any other utilities?
A electricity/gas supplier is normally (in my experience) arranged by the builder for a new-build. The builder should tell you who the supplier(s) are. On moving in, you take the meter readings and contact the supplier to get the accounts put into your name. You can then, if you want, arrange to move to a different supplier. A supplier might ask for a deposit against future bills, though I don't think this is common practice.

With Council Tax, you notify the council when you move in, and they will send you a bill. Generally with council tax you pay monthly. They calculate the amount you owe, and split that into (approximately) equal monthly amounts.

For broadband it depends on what suppliers are available in your area. Yes, some broadband providers provide frankly ridiculously fast speeds, but most of the time you'll find even 10Mb/s is perfectly fine. (My area has recently had a fibre-to-the-premises company install ducting to the area where I live. Their top-tier product is a 900Mb/s service. I'm perfectly happy with the 6Mb/s service I get from an ISP that uses my standard BT landine.)

I can't think of any other utilities, unless you want/need a standard phone line.

Also, a credit card balance ends up giving a bad credit history in which case exactly? New to them here, only getting them as a safety net, just in case, so interested in getting to know them as well as ensuring I don't get a bad credit history of I do end up potentially using them only I have to. Does the balance on the credit card itself from its first month of appearing to the next cause bad credit history as it's past the one month point? I take it this may not apply for like the Barclaycard which I think copes with 20 months or so of such or without any interest at all if I'm not mistaken.
You get a bad credit history when you take out credit and don't manage it correctly. The key thing is to make the required payments on time, and not to miss any. Ideally with a credit card, you pay the full statement balance before the due date, and if you do that you won't be charged any interest. Always make sure you pay at least the minimum balance. If you can't pay the balance in full, always pay as much as you can afford, to minimise the interest you get charged.

Even if you get a credit card offer where you don't pay interest for a fixed period, there may nevertheless be a minimum monthly payment. Make sure you understand the terms and conditions and don't break them.

Your "credit history" is the whole pattern of how you make use of the credit you have available to you.

With overdraft, how long is someone allowed to be in overdraft for until they got some sort of problem ? Is it one month from the date they've entered the red, the overdraft facility, and then maybe their bank just stops their bank account totally or something? What if they stayed within their agreed overdraft limit, even if stretched to going beyond a month perhaps?
A bank will normally expect to see money flowing in and out of an account with an overdraft facility. They will generally like to see an account being in credit for all/most of the month, perhaps with the balance dropping below zero when there "too much month left at the end of the money". You should try to avoid using an overdraft, as the interest rates are penal (typically around 40%).

Note that what I've written doesn't necessarily apply to overdrafts on student current accounts which generally don't charge interest, and when the money flowing into the account isn't necessarily monthly. I suspect students can end up living for long periods overdrawn in a way that a bank might not be happy with on a non-student account.
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Anonymous370
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#5
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(Original post by martin7)
x
Thanks for your insights, they've been helpful .

I'm at the stage where I've got two mortgage brokers digging out their best option, after which I'll see which has the best among the two and then go ahead really. Do you know how long it'd take? I heard from one that it's a 6 week-long:confused: process, mainly because of solicitors/legal work needed, and from another, it's a 10 weeks:eek: thing, not sure if the latter is true. I wonder also if it it will be the case that I'd straight after it either have my move-in date come by or there'd be like a gap, perhaps up to 4 weeks or so, for my move-in date. I ask as for the current place I'm renting at, I need to give one month's notice before I leave. Of course, any time over the period that I'll be renting here and at the same time be regarded as move-in in the new place, even if far off from fully there, it'll be expensive living with two places in the sense that my payslip and living costs are barely different, latter even tiny bit higher, so gotta be careful too with dates, timing and all.
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one_two_three
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#6
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Worth asking the mortgage brokers about some of the finer details because some mortgages can be moved onto other properties. Say you have a mortgage of £150,000 and you buy a 1 bedroom flat for £170,000, then you decide to relocate to a new area. In the new area you are able to afford a house for £170,000 so you sell your old flat, you do not need a new mortgage amount because your current mortgage will cover the new property so you move the mortgage onto the new property. This is worth it if you have a few years left on it and a good interest rate. Not all mortgages have that built into the terms (and even then they will only let you move the mortgage if you are still in a good position financially).
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Anonymous370
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#7
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(Original post by one_two_three)
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Ah, cool.
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martin7
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#8
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(Original post by Anonymous370)
Thanks for your insights, they've been helpful .

I'm at the stage where I've got two mortgage brokers digging out their best option, after which I'll see which has the best among the two and then go ahead really. Do you know how long it'd take? I heard from one that it's a 6 week-long:confused: process, mainly because of solicitors/legal work needed, and from another, it's a 10 weeks:eek: thing, not sure if the latter is true. I wonder also if it it will be the case that I'd straight after it either have my move-in date come by or there'd be like a gap, perhaps up to 4 weeks or so, for my move-in date.
There are two key dates you need to be aware of: the first is called "exchange of contracts", the second is "completion".

Exchange of contracts is where you commit to buying the property, and the seller commits to selling it to you. You and/or the seller can withdraw at any time before exchange takes place; but once you've exchanged contracts, neither party can pull out unless the other consents.

Completion is the point at which the sale is completed. It's the point where the money is transferred and the legal ownership changes.

If I remember correctly, you would agree to the completion date before you exchange contracts (and it becomes part of the contract).

I ask as for the current place I'm renting at, I need to give one month's notice before I leave. Of course, any time over the period that I'll be renting here and at the same time be regarded as move-in in the new place, even if far off from fully there, it'll be expensive living with two places in the sense that my payslip and living costs are barely different, latter even tiny bit higher, so gotta be careful too with dates, timing and all.
You would simply set a completion date a month (or five weeks) after exchange, and then give notice at the place you're renting. That way you'd only be paying in both places for a couple of days.
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martin7
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#9
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(Original post by one_two_three)
Worth asking the mortgage brokers about some of the finer details because some mortgages can be moved onto other properties.
Tthe term used to describe such mortgages is "portable".

MoneySavingExpert has more information on portable mortgages at https://www.moneysavingexpert.com/mo...your-mortgage/
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Anonymous370
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#10
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#10
(Original post by martin7)
Tthe term used to describe such mortgages is "portable".

MoneySavingExpert has more information on portable mortgages at https://www.moneysavingexpert.com/mo...your-mortgage/
Cool.

For sofas, I've had a look at Wayfair which seem impressive with something they've got of interest. I'm wondering if they had a showroom or not, any idea? I can't see to find a proper showroom of theirs at all on Google Maps for some reason so wanted to ask. Are Wayfair decent? It seems from reading Google reviews that their customer service isn't so great unfortunately.

The sofa from Wayfair I found of interest was in their jade/bottle green colours, both these two colours appealed to me and seemed really nice, and I couldn't even decide amongst these two too. A showroom to actually see the sofa in these two specific colours as well as get a feel for how comfy it really is practically would be great of course.

Also, keen to know of any other sofa sellers out there that are good. Any ideas?
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one_two_three
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#11
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#11
(Original post by Anonymous370)
Cool.

For sofas, I've had a look at Wayfair which seem impressive with something they've got of interest. I'm wondering if they had a showroom or not, any idea? I can't see to find a proper showroom of theirs at all on Google Maps for some reason so wanted to ask. Are Wayfair decent? It seems from reading Google reviews that their customer service isn't so great unfortunately.

The sofa from Wayfair I found of interest was in their jade/bottle green colours, both these two colours appealed to me and seemed really nice, and I couldn't even decide amongst these two too. A showroom to actually see the sofa in these two specific colours as well as get a feel for how comfy it really is practically would be great of course.

Also, keen to know of any other sofa sellers out there that are good. Any ideas?
Wayfair are a little bit like ebay, but it's not an auction. So it is an online market place for a lot of companies. They can be very hit and miss and there are funny stories of people buying items like sofas and then they are actually miniature. So always check the dimensions of what you are buying before you purchase. The quality can be very hit and miss as well. I personally have never brought an item from there but if I was going to I would only use a credit card, just because of the added protection.

I would not buy a sofa until you have a property. Your design idea may change when you see a property and you don't want a sofa that won't fit into that, especially when it's such a bold colour. Also, you need to know that it is going to fit because a sofa is an expensive item.

DFS are good in my opinion, as are Next. I am sure there are a lot of good sellers out there with shops, but I don't really shop for sofas so I can only say what I have experience of.
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Anonymous370
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#12
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#12
(Original post by one_two_three)
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Cool, thanks.
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Anonymous370
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#13
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I got the best option across two brokers, so will go for this one, but they said solicitor I'll need to arrange myself . Is this hard? How difficult? Any tips/advice? Thanks
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Quady
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#14
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#14
(Original post by Anonymous370)
I got the best option across two brokers, so will go for this one, but they said solicitor I'll need to arrange myself . Is this hard? How difficult? Any tips/advice? Thanks
Id welcome any tips on how you select a solicitor
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