House swapping

[looking]

Hi,

I am looking for some advice about house swapping. We currently live in an apartment however after the birth of our 2nd child it is no longer possible to stay here. As we bought a few years ago, out apt is now in negative equity. We have friends living in the same estate who own a 4 bed house and are looking to downsize. We are considering a house swap as each other's property would meet the others needs. However we are unsure how exactly this would work? Anyone any advice? Presumably we could value the properties and pay the difference. Are we mad looking into this scheme? the advantage would be that we would be able to sell on our apt and get a family home that we desperately want. or are we crazy to be taking on an even bigger property during this time (our mortgage repayments would be the same as the difference in values could be paid out of savings) Has anyone done/heard of anything similar before?
Thanks in advance
Suzie

 

[Vanilla]

It's not really a scheme. It is considered two separate transactions- you sell your apt and buy a house. They sell their house and buy an apt.

Lets say for example your apartment is worth 150, current mortgage 180. You want to buy the house valued at 200. You will only get at most a 92% mortgage to buy the new house so you will need 8% of the value of the new house as a deposit along with stamp duty and legal costs- all after paying the deficit of 30 on the apartment out of your savings. If you qualify for a mortgage of 92% on the new house based on your income and you have sufficient savings otherwise, then there is no issue.