MaxUK

Hi everybody,

My wife (American) and I moved to Charlotte, NC, in mid-2017 and we've been renting since August. We've now received an offer on our house in Brighton, UK, and made an offer on a house in Indian Land, SC.

I'm hoping the financial experts on this forum can provide some tips on how to navigate this entire process. Our situation:

1. Bought property in 2014 for 480k pounds sterling (mortgage of around 210k)
2. Selling property now (March) for 525k pounds sterling w. 1.1% + VAT sales agent fee
3. We'll be paying off a mortgage of around 180k pounds sterling, so will have around 345k equity
4. Hoping for exchange/completion in mid-May
5. Our offer of $543k has been accepted on a house in SC
6. Looking to arrange a mortgage of around $175-200k
7. Earnest money of $5-10k expected (new-build inventory basically complete)

We've bought/sold a couple properties already in the UK and know about the usual solicitors' fees, potential small house renovation costs from survey, costs of cleaning/moving out belongings from house, etc.

We're also going to have some moving costs in Charlotte, NC, potential for most closing costs to be paid if we use a preferred lender, etc.

The big unknowns are the tax burden , what exchange rate we're likely to get (which obvs. depends on the day that we convert the money but how do you ensure you get the best exchange rate?), and the APR & type of mortgage we get. Also, anything else I might have completely overlooked?

Thanks so much for all your help; so many factors to take into consideration!! Any and all tips and advice appreciated!

Pulaski

What was the exchange rate on the day you bought your house in the UK/ took out the mortgage? You will need that to calculate the exchange gain on the repayment of your mortgage.

MaxUK

Is that the original mortgage (i.e. when we bought a property before this in London) or when we ported the mortgage & added to it for the Brighton property?

My wife tells me we actually completed on the Brighton property in Feb 2015, haha. So the UK/USA exchange rate on the day was 1.5403.

Pulaski

Were you allowed to move a mortgage loan to a different property but keep the sale interest rate and term?

I think it would only be the rate related to the loan secured on the property you currently own and are selling.

MaxUK

Yes. We just added a second mortgage product on top.

Pulaski

Hmm, OK, well I've been thinking about it - as it is the loan that is creating the gain, I think you will have two calculations: the gain on the original loan piece using the exchange rate from when that loan contract started, and the gain on the top-up product dating from 2015. Each will have a calculation, and given the collapse of sterling, each will have a gain, but you will need to discuss that with a suitably experienced tax accountant.

Each calculation will be the dollar value of the payoff amount using the exchange rate at the time the loan was originally taken out, and then deducted from that the dollar value of the payoff amount on the date of the payoff. You will be liable for CGT on the difference.

tom169

Indian Land has definitely had a property value boom.