If you currently own a property, you might already know that getting the right mortgage doesn’t get any easier the second time around. You will need to think about finding a buyer for your current home on top of everything else – then you’ll need to think about moving your mortgage over.
In this article, we’ll look at home mover mortgage options so that you can make the right decision about what is best for you.
What is a Home Mover Mortgage?
There are three options when it comes to moving house. Firstly, you could move your existing mortgage over to your new property. This is referred to as ‘porting’, alternatively, you can find a new mortgage by remortgaging your property with your current lender. Thirdly, you could take out a mortgage with a completely new lender.
Here is a bit more information about each of those three options.
What is Porting?
These days, many mortgages are portable. That means that you can move your current mortgage to a new property. If you do this, you’ll still need to go through the application process and you may need to raise your loan amount if your new home is more expensive than your current property.
If you do need to increase the amount of your loan, then your lender may need you to take out an additional mortgage with which to cover the difference in price between the two properties. This will come with an additional arrangement fee. You should check with your lender to find out how much this will be.
Remortgaging With Your Existing Lender
The next option that may be open to you would be to completely replace your existing mortgage with a new loan from the same lender. You may be able to find a better interest rate by doing this, however, you will need to pay extra costs.
To leave your existing mortgage deal you will often need to pay an early repayment charge. This could be anything from one to five % of your mortgage and the amount that you’ll need to pay will depend on how much time you have left on your existing deal. The closer you are to completing your mortgage, the lower the charge will be.
You may also need to pay an exit fee. This will be in addition to an arrangement fee and a valuation fee on your new mortgage.
Before you decide to take this step, you must find out how much you will need to pay in fees and charges.
Remortgaging With a New Lender
Your final option will be to find a mortgage product with a new lender. You could then use this mortgage to pay off your existing mortgage, or you could pay off your old mortgage when you sell your home.
There will often be early repayment fees in addition to exit fees for leaving your current mortgage early. Again, before you take this step, make sure you find out all of the fees and charges involved.
How Is Your Mortgage Affected By Upsizing?
If you’re moving to a house that is of greater value than your current property, you’ll need to prove you can handle the higher monthly repayments. You’ll have a better chance of doing this if your current property has risen in value since you bought it.
If your wages have gone up and your outgoings such as credit card repayments have gone down, this will also help to satisfy a lender. If you have had any problems with making payments on your existing loan, then you might find it harder to secure a mortgage on your next property.
How Is Your Mortgage Affected By Downsizing?
If you plan to move into a smaller or lower-value property, then you should see the size of your loan decrease. This, in turn, will help reduce your monthly payments too.
There may be a chance that you could buy the home outright, depending on if your current home has increased in value enough and the difference in value between the two properties is big enough.
How Does Negative Equity Affect Your Mortgage?
If your current home has dropped in value, and you owe your lender more than what it is worth, then you are in negative equity. If this is the case, you will find it hard to get any type of mortgage on your new home.
Some lenders may still lend to you though if moving is a necessity. For example, if you were planning on moving because of work.
How To Find The Best Deals
Depending on your personal circumstances there are a lot of different options when it comes to finding a mortgage and searching for the right one can be complex and time-consuming. There are many tools available online, including mortgage calculators, that will let you compare mortgage deals and mortgage rates.
When working out how much you will need to borrow, remember to include all of your early repayment fees as well as any exit fees, valuation fees, and arrangement fees.
How Can a Mortgage Broker Help?
Before you make any decisions about whether you will stay with your existing lender, or take out a new loan elsewhere, you should make sure that you consider all your options carefully.
With lots of different mortgages available and different fees associated with each one, you should compare all of the options and consider talking to mortgage advisers. A Mortgage Broker who is authorised and regulated by the Financial Conduct Authority, can help you with your mortgage application and may also be able to help you find the most suitable home insurance for your property.
Some benefits of talking to a What Life and Mortgages Broker:
- We save you time – by understanding your personal circumstances we can go straight to the lenders we know will suit your application. This saves searching time and continual requests for updated information or delays.
- We save you money – we can look across the market for not only the right mortgage rates, but for other fees that may apply. For example if you have a job that may require relocation or you are thinking of starting a family we will give you access to lenders who will allow your mortgage to be ported or have lower exit fees, saving you money in the long run.
- We give you access – we can work across the market of available lenders, not just those you have heard of. We also have Broker only deals that are not available to you if you go direct.
- We give you expert advice – we are financially trained and do this for a living. Whilst you can apply for a mortgage without us we have up to date market knowledge and are experts in the field. Would you fix your car yourself, or take it to a trained mechanic?
We take care of the paperwork – we do this every day, we know what information is needed, ask you the relevant questions and take care of the rest. We want this process to go as smoothly as possible for you.
- We can follow up on your behalf – we know how long this process takes and where the delays occur. You can consider us an ally on your side ready to follow up even before things are taking too long.
Speak with one of our brokers before you decide as they will have a good understanding of all of your options.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.