If you already have a foot on the property ladder and are considering a move, the costs you face are the same as those from a first-time buyer, with one major difference: As long as your current home has risen in value since you bought it, the sale proceeds will provide you with a deposit of your next property. How big a deposit depends on how much you have left after:
- Negotiations with your own buyer - you may end up reducing the asking price by as much as 10%
- Paying off what you owe on your current mortgage - together with any charges for repaying it early (if applicable, though these charges may be waived if you take out your next mortgage with the same lender)
- Paying the estate agent - unless you choose to sell privately
- Meeting the legal fees involved in selling - unless you do the conveyancing yourself
- Covering the cost involved in buying the next property, as well as removal expenses
If all these costs add up to an amount that reduces the potential sale proceeds to zero - and you have no additional cash - trading up is not an affordable option. You will need enough out of what's left to put down a deposit of at least 5% on the new property, and of course you must also earn enough to get the size of mortgage you need.
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