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Your New Home Mover Mortgage
Buying a new home is an exciting step, but as you’ll know from buying your first house, the process can be a complicated one. When you’re selling your existing home to buy a new one, there are all kinds of things to consider, including your mortgage.
As you take the next step on the property ladder, it’s important to know what your mortgage options are. Here is our guide to home mover mortgages to help you make the right choice.
What is a Home Mover Mortgage?
A home mover mortgage is a mortgage that will apply to your next home. There are several options available to you, including transferring your existing mortgage to your new home (known as porting – see below), or taking out a new mortgage with your existing or a brand new lender.
Moving to a new home can have an impact on your mortgage payments. You could have a larger deposit that will help reduce your mortgage payments, or if you’re downsizing, you could end up with a much smaller loan.
What Is ‘Porting’?
Porting a mortgage involves moving your existing mortgage over to your new property – making it a ‘portable’ mortgage. Many providers allow porting on their mortgage products.
If you decide to go for the porting option, you’ll still need to make an application through your lender. If there is a significant difference in the cost of your new home, you might need to apply for a higher lending amount, or apply for a second mortgage to cover the difference.
If your financial circumstances have changed, you might find it more difficult to get approved for the same mortgage. This is worth bearing in mind when it comes to looking at your options.
Should You Remortgage With An Existing Or New Lender?
You might decide to take out a new mortgage altogether when you move home. You can apply for a new mortgage with your current lender, or seek out a new lender.
There are some things you’ll need to consider before taking on a new mortgage including:
- Are the rates available better than your existing mortgage?
- Are there any early repayment charges or exit charges for your current lender?
- Will there be an arrangement fee for your new mortgage?
- Is there a valuation fee to pay? (some lenders include this free of charge as an incentive for taking out a mortgage with them)
While you could be offered a better interest rate when applying for a new mortgage, the additional fees could mean you’re not really getting a better deal after all. You’ll need to weigh up the pros and cons carefully when making your decision and take into account
the new mortgage rate, associated costs such as home insurance and, as mentioned above, any early repayment fee.
How Is A Home Mover Mortgage Affected By Changes Such As Upsizing/Downsizing/Negative Equity?
When it comes to buying a new home, there are different factors that will affect your home mover mortgage. Buying a smaller or larger property, for example, will affect your mortgage, as will buying a new property when you have negative equity in your existing home.
If you’re buying a larger/more valuable property, you’ll need to demonstrate to your lender that you can afford the larger monthly repayments. This is easier if you’ve built up equity in your existing home.
By downsizing to a smaller or cheaper home, you could benefit from a decrease in your mortgage payments. If there is enough equity in your home, you may not need a mortgage at all.
When your home decreases in value from when you bought it, you’ll enter into something called negative equity. In this case, you could find it difficult to get a mortgage on a new property.
How Can A Mortgage Broker Help?
With various options out there for home mover mortgages, it can be difficult to know which one is right for you. But that’s where a mortgage broker comes in handy. They will know which personal details are important for your application and will calculate how much you could borrow from different lenders.
A mortgage broker, authorised and regulated by the financial conduct authority, can help source and recommend mortgage deals based on your circumstances. At Spot On Mortgages, we have access to a wide range of lenders and mortgage products that can help us find the right type of mortgage for you.
By finding your home mover mortgage with Spot On Mortgages, you could benefit from our expert advice, while saving time and money finding the right deal. We can also save you a lot of the hassle of filling in your paperwork and dealing with lenders, making the mortgage application process much less stressful.
If you’re looking for a home mover mortgage, contact our mortgage advisers today to see how we can help you.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Why Spot On Mortgages to this?
Other types of mortgages are available such as Variable, Cashback, Capped, Collared & LIBOR.