Home Mover Mortgages - What you need to know
If you have an existing mortgage and you plan to relocate during the next few months, understanding the ins and outs of home mover mortgages is important. Essentially you can choose to move your existing mortgage with you, otherwise known as porting. Or remortgage either with your existing provider or a new one.
With this option you will still go through an application process. You may need to increase the size of your mortgage if it is more expensive than your existing property. If you stay with your existing lender this could mean a separate mortgage that covers the difference.
Remortgage with your current lender
There is an option to completely replace your current mortgage, by taking out an entirely new loan with your current provider. Although you might be able to find a better rate this way, you may face exit fees/early repayment charges. This could be between 1-5%, depending on the length of term you have remaining on your existing mortgage, the closer to the end of the mortgage the lower the fees.
Remortgage with a new lender
You can find a mortgage for your new home with a different lender. You could use this to pay off your existing mortgage, or you can also pay for it through the sale of your home. This could be advantageous to you if house prices in your area have risen significantly since the time you bought your current home. However, as with all remortgages, if you are not undertaking a remortgage process at the end of a fixed rate period you could find you will need to pay fees for exiting or repaying early from your existing lender, plus additional arrangement fees.
What if the value of my house has increased or decreased since I purchased it?
If your house has gone up in value since you bought it, you will have built up “Equity”. This could increase your chances of getting a bigger mortgage for a more expensive property as you can put it towards your deposit, or you could use the equity to pay more towards the new property if it is a similar or lesser value.
If your house price has decreased or has negative equity, it is best to speak with your mortgage broker before proceeding, as you may find it more difficult to get accepted for a new mortgage.
If you plan on moving home to a smaller/cheaper property or “downsizing”, you may be able to take out a smaller mortgage and reduce your monthly repayments, providing your personal financial situation is unchanged from your original application.
How do you arrange a home mover mortgage?
It is advisable to speak to an independent mortgage broker or adviser. They will be able to review your personal details. Based on your credit scoring, existing house value, ideal monthly repayments, they can review the market to find the most appropriate mortgage rate for you. Whilst looking at online mortgage calculators give you an idea, mortgage brokers have a great deal of experience of the mortgage application process and can give you access to lenders, products and mortgage deals that you won’t find anywhere else.
How do home mover mortgages work?
Home mover mortgages are portable, and that means you can move from one property to another without having to worry about making any changes.
Remember that not all mortgages are portable, and so you must select the most suitable and logical solution for your situation.
So, get in touch with a mortgage adviser, explain your situation, and ask them to list your options and highlight all the potential costs involved. That way, you can make an informed decision and avoid any mistakes or misunderstandings.
You should now have a basic understanding of home mover mortgages, their purpose, and how to get one as soon as possible. Regardless of your situation, home mover mortgages offer a level of freedom and flexibility that could make all the difference as you move through the relocation process.