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Confused, how does part exchanging your house for a new build work?

My friend told me that it comes off the existing price of the new build, but I don't understand how it works because I still have a lot to pay on my existing mortgage. So if I was to part ex, does the part ex clear this old mortgage and do I have to get a new mortgage on the new build for the full amount? What she has said is that I could sell mine for example in part ex for 60k when I have a mortgage for 70k, this would be then taken off a new build of 100k leave me with 10k outstanding on the old and 40k on the new. Is that correct it seems too easy. I am really confused.

Asked on Jul 20 2010, Selling in Hyde | Report content

Answers (3)

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  • Part exchange works like a normal property transaction, the builder becomes your buyer, you will still need to process the conveyancing on your new build purchase and if you are needing a mortgage this has to applied for in the same way as if you were buying a second hand home. The process is a lot quicker than a normal transaction but still works the same way. I would however have your home valued independently of the builders valuation by a local expert agent. In my experience many developers will not give you much more than 80-90% of the actual market value. Dont forget many will immediately sell your home on the open market as soon as they become the legal owners. The only benefit of part exchange is speed and lass hassle, very rarely do people get a good price for their homes.

    Answered on Jul 30 2010, Report content
  • Despite what has been said, part exchanging (especially in the current climate) can be a god send, not only did I get more than the 'market value' (they marketed it and sold it immediately afterwards at £9000 less than what they offered me for it) but as it was viewed and sold whilst I was in occupancy, they gave me £250 as an incentive (inconvenience fee?). Even though the sale was concluded we were never forced to move out and only had to agree a date for moving. In relation to the question regarding mortgages, many banks are willing to allow you to port your mortgage though this is not as straight forward as taking your mortgage with you. You will 'redeem' your old mortgage and effectively take out a new one with same/similar terms but you will scrutinised the same as if applying for a new mortgage from scratch so will need to satisfy their basic lending criteria.

    Answered on Mar 11 2011, Report content
  • Hello Teolis! I've just stumbled across this question, I know it's very old but it might be of some help to some one else in your situation. So... Developers will sell a new flat for example, and as well as taking a chunk of cash for the property, they will also take in the property that the buyer is currently living in. It cuts out all problems for them, such as chain issues or the potential for the property to fall through. However, I think it’s worth making you aware that you generally don’t get the full market value for your property if you part exchange it. It will be something around 85-90% normally, that the developer is willing to pay. That way, of course, they keep a little bit of margin in there for themselves, as profit, and also can also help to cover all the costs and so on, when they then subsequently sell your property. Hope that helps any one looking for information on this subject from Zoopla. Jonathan Rolande :-)

    Web reference:

    Answered on Sep 23 2015, Report content

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