selling on from a recent mortgage

[beves]

i bought apartment two years ago and wish to sell now and buy elsewhere. how do i calculate what profit if any i make considering that i have a very new mortgage? and how does the system work when i sell the apartment - does the bank get the cheque and refund me any profit? The place I intend to buy will be a lot more expensive than where I am now so how does this figure when applying for new mortgage?

 

[mf1]

The sums go like this: ( these are just simple hypothetical figures)

Value of property: 500,000.00

Amount required to redeem mortgage: 450,000.00

Difference 50,000.00

Take off solicitors and auctioneers fees 10,000.00

Nett profit on sale 40,000.00

If you want to buy at 750,000.00, you will have transaction costs ( solicitors) so say a total of 755,000.00, you will have a deposit of 40,000.00 ( and any other savings) so you will need to find 715,000.00. Would a bank lend you that amount of money? They very likely will only lend you 90% and they also need to decide if you can meet the repayments.

You probably need to talk to a lender to see how much they would lend you to really clarify your figures.

mf

 

[huskerdu]

To answer your other question
The buyers cheque goes to their solicitor and between the two solicitors the cheque is split between the mortgage company and the seller.
The solicitors sign an undertaking to the mortgage company to redeem the mortgage from the selling proceeds.

 

[cloughy]

the description is not correct - its not the profit you have made but is the net castflow, as you could have funded part of the purchase price yourself and have a smaller mortgage but price paid could have been higher.

To calculate profit as follows:

Sale price - fees - taxes etc
less
cost + fee + stamp duty if applicable

= profit

cashflow is net sale proceeds - outstanding mortgage - fees