Moving home can be daunting and from a mortgage perspective there a number of different factors to consider. If you have a mortgage already you need to establish whether you can remain with the same lender and “port” over the mortgage to the new property, potentially topping up and borrowing more with them, or whether a new lender will be more cost effective.
Thinking of moving home and need mortgage advice?
A home mover mortgage isn’t any different to a standard mortgage. It’s simply the process of getting a new mortgage when you move house so the mortgage is suitable for the house you’re moving into. Choosing the correct mortgage for you is critical as you will need to ensure it is still affordable whilst suiting your changing needs.
When it comes to moving home, one of the first things that you need to take into consideration is looking at how much you could borrow. From there you would need to find the best home mover mortgage that will suit your circumstances and also watch out for any early repayment charges. Home mover mortgages are for when you change your mortgage provider, you move to a more expensive property, or where you downsize and your monthly repayments will be reduced.
How does a moving home mortgage work?
Home mover mortgages are typically for people who are stepping up the property ladder and looking for a bigger home, and as a result are also looking to increase the size of their loan amount. Many mortgages are ‘portable’, which means you can take your existing mortgage to your new home, others are not, requiring you to look for another option when moving home. You might also find that your current loan provider won’t allow you to borrow the additional amount necessary for you to move home.
Even if you aren’t looking to borrow more money, changing your mortgage when you move house, rather than transferring the current one over, we can help to better suit your new circumstances and get you a better deal. Once we have gathered the relevant information we will calculate early repayment fees, interest rate, stamp duty, monthly payments, credit score, and product fee to make your new loan the most suitable product for you.
Porting your fixed rate to move your current mortgage to a new house
To port your mortgage is where you transfer your current mortgage to your new property, meaning that the mortgage is ‘portable.’ There will still need to be an application process for the mortgage loan, and in some instances you might need to increase the mortgage because of the new cost of the property. If this is the case, a new arrangement fee will be added on, so checking what this will be is a good idea first. If you need an additional loan for higher property cost, then you could face higher interest fees which will also mean higher mortgage repayments.
Existing Mortgage Early Repayment Charges (ERC)…
When a client enters into a contract for their initial mortgage they are bound by the terms and conditions of this and might be subject to a fee when leaving that existing mortgage. The process of changing any mortgage to a different lender is classed as remortgaging if staying in the same property, if you are moving property then you might just need a brand new mortgage product with a different lender.
You should check whether there are penalties – also known as Early Repayment Charges (ERC) – for ending your current agreement earlier than contracted. You should check if these exist on your current mortgage before considering changing your mortgage as some of these can be quite large and it might affect your budget your your new property significantly.
How Alexander Southwell Mortgage Services can help with your moving home mortgage
- We can assess your current mortgage: We can tell you whether it is in your best interest to change to a new mortgage agreement or transfer your current one to your new property.
- We are experienced and knowledgeable: Our experts and will lead you through the mortgage maze, helping you make the right decisions, until the day arrives when you pick up the keys to your new home.
- We’re independent mortgage brokers: This means we offer a comprehensive range of mortgage products from across the market. We offer both first and second charge mortgages, but not deals that you can only obtain by going direct to a lender.
Frequently asked questions – Moving Home Mortgage
Can I Break the chain or complete a purchase before my sale?
In some scenarios, you might want to break the chain in a purchase, which is common on new build properties, where the developer may insist on buyers being chain-free but it could also just be your preference to avoid delays or the potential for gazumping for example.
Whether this is possible will be different for each client and depends a lot on how much cash might be available for a deposit or the potential for raising funds from the existing property or other sources like a personal loan. A mortgage broker like us can help you weigh up the different options that might be suitable like bridging loans, further advances and secured loans and what set up will work best.
Repayments on your mortgage when you move home, will they be higher than your existing mortgage?
In the majority of scenario’s they would be higher, most people are looking to upsize and will more than likely be taking out a larger mortgage in doing so. When we assess your scenario we will make sure your new mortgage deal, fixed rate & repayments on your mortgage all fit within your budget. This might mean with your new mortgage we might need to tweak and make adjustments to get your ideal new mortgage deal, maybe changing the mortgage term or having a different tie in period, when you take a mortgage with us we assess your full home movers scenario and make sure the mortgage deals we offer you, you are 100% happy with.
How does porting your mortgage work?
When you are moving home, you will still need to apply for a mortgage. This is because the loan itself is not what transfers; it is the rate and the terms/conditions. As part of the moving process, your existing mortgage is paid off in full and a new mortgage is taken out against the new property. If you port your mortgage, you may get to keep the same lender, fixed rate and conditions. This will save you having to pay any early repayment charge.
What if my credit score/rating is poor?
All lenders understandably see borrowers with poor credit as being riskier and consequently may need a larger deposit from such applicants or might even reject an application due to a poor credit rating.
So, if your credit rating has fallen and especially if you have had recent credit issues, there is no guarantee that that any lender, even your current lender will give you a mortgage when moving home. Getting a mortgage whether you are moving home, first time buyer or investing in a buy to let property with any form of adverse credit is a slightly different process as we will request to get your credit file, once we have this it will make it clearer with how much you could borrow and what interest rate is going to be available for you.
Do I need new mortgage protection when moving home?
As the single biggest purchase most of us will ever make it makes sense to protect it. Buildings insurance is a requirement and your mortgage lender will insist on this, for peace of mind and to protect your possessions and valuables etc contents insurance should also be considered. When taking your mortgage with us our mortgage brokers can help you with this.
In regards to your life insurance, critical illness cover and income protection, we will also discuss this through the process of getting your new home, the level you cover you have at the moment might not be suitable for the new mortgage so we will recommend that this is updated but it is not mandatory to obtain with a mortgage with us.
Check out our help mortgage calculators which can help you in the home mover process, you can roughly find out how much your monthly payments will be. The stamp duty calculator will inform your how much you need to pay which will give you a great indication on what you might be able to to put down as a deposit on your new home.
There are a number of mortgage providers out there, but the good news is that when you use a mortgage broker, they do the leg work for you. All of our brokers are fully qualified and will look at your personal circumstances, budget to find out what you could borrow, and current situation, to work out what the better mortgage deal will be. The good news is that there are a number of benefits of using a broker. If in any circumstance the information given is incorrect, you are covered by the Ombudsman.
Get in touch with us today to discuss your options and how we can help you.