Are you finding the best moving house mortgage in 2022? No worries! Let us start here is the best place for you! What happens when you decide to move to another property if you already have a moving house mortgage? Is it easier to get a new loan or to use the current one, maybe to raise your debt size? This guide addresses your choices.
Can I move to a new house with my current Mortgage?
If you are moving house and already have a mortgage on your current home, you will be able to move your mortgage to your new property or ‘port’. To find out if your contract is, in fact, portable, it is worth testing your moving house mortgage information.
When you have arranged the contract, you can either look at the documentation you were given or ask your broker or lender. You would also need to reapply and go through the same affordability, and credit checks you went through to get the mortgage, even though porting your mortgage is possible. As well as legal costs and stamp tax, you’ll still have to pay for a valuation.
When your financial circumstances have changed, you can find it harder to get accepted for the same mortgage. If you have changed jobs or become self-employed, for instance, you have kids or have seen any other change in your financial circumstances.
How does it work to sell a moving house Mortgage?
Porting is an excellent versatile feature for moving house mortgage, but there are no assurances that your lender would allow you to do it, and you might end up borrowing to boot at an noncompetitive rate. Here’s the explanation:
1. You must Apply again, so you may not Qualify:
In essence, you have to reapply for that offer when you ask your lender to ‘port’ your mortgage. So, you do not qualify because it is much harder than it used to be to get a mortgage now. If things have changed, you can struggle, e.g., you’re now self-employed, earn less, or have more debt and outgoings.
Or maybe you haven’t changed at all, but your lender’s conditions have because even though you got your first mortgage without hassle, that doesn’t guarantee the same thing will happen again. And if you haven’t made all of your mortgage payments on time, the lender is likely to refuse in the expectation that you’re leaving them.
2. You may not be able to Acquire more Money:
If you move to a more costly house, you will need to borrow more money, but if you are already close to the limit that it can lend you, your lender will not allow this.
3. You could end up with two loans if you borrow:
If you move to an extra costly house, you will need to borrow additional cash, as many people do if they’re searching for a bigger home. The lender will demand if it is willing to lend, that the other loan goes to another mortgage product, which is likely to include an agreement fee and possibly a higher rate.
4. At a low rate of interest, you might end up borrowing:
Know that you’re bound to one lender if you can port and can borrow more, so you’ll have no choice but to pick from the rates you’re offered. These might not be very affordable and may be far from the best available cheapest sales, leaving you stuck paying a higher interest rate.
What issues if I need a Larger Mortgage?
To purchase a more expensive house, if you need to raise your loan’s size, you would also need to follow the lender’s borrowing conditions for that extra amount, which could be more stringent than for your original loan. You will also have to pay a premium for the new mortgage to be provided.
As an alternative to porting and increasing your current mortgage, you can opt to take out a new mortgage with a new provider if you can find a more competitive offer. However, be mindful that you can need to pay early repayment charges and other fees to terminate your current mortgage contract. To see which would be the most cost-effective alternative, you would therefore need to make a range of careful calculations.
What to look out for if your Mortgage is Posted?
You can end up with two mortgages if you want to port your current mortgage, but you need to borrow more. Your current lender will require you to take out a new loan to cover the difference. It could suggest paying another mortgage arrangement fee and secured into a less favorable interest rate offer.
But if you plan to practice for a new mortgage entirely, even with the same lender, to get out of your current contract early, you can have to pay an early repayment fee. For a fixed-rate mortgage, depending on how far you are into the mortgage term, this is usually between 1 per cent and 5 percent of the mortgage amount you have left to pay, but if you are in the last year, you will pay less than if you were in the first.
Tips to keep the mortgage expenses down
If you do not need to increase your borrowing, transferring an existing mortgage from your current lender to a new property will help reduce costs. Assume you are locked into a fixed-rate contract, and you will delay leaving, waiting until your fixed deal has come to an end will be more affordable as you are on the SVR of your lender as you will not have to pay any early repayment fees Even if you have to pay an initial repayment fee. In that case, you can find that the expense is offset by moving to a lower interest rate mortgage, so comparing the costs is relevant.
Moving with a Larger Mortgage to a bigger House
You would have built up ‘equity’-the capital that would be yours if you sold the house and paid the mortgage-if your house has risen in value since you purchased it. For a more expensive home, having equity will boost the chances of getting a larger mortgage as you can put it against your deposit. If you have had a pay rise or reduced your outgoings and kept up with your current mortgage repayments, you are also more likely to get approved for a larger mortgage.
Moving to a cheaper house and a lower mortgage
If you’re trying to downsize, a rise in your current home’s value may mean that if your financial condition has not changed, you will be able to take out a smaller mortgage and decrease your monthly repayments. If the valuation gap is big enough, by using the equity you have built up in the new house, you might even be able to get a better mortgage-free home.
With negative equity moving house
Suppose your home is in negative equity, where the house’s current value is less than your existing mortgage. In that case, it is best to speak to your mortgage lender before going ahead with your home buying plans, as you will find it more challenging to get approved for a new mortgage. You can see that if you need to move because of a new job, you can only move home or some limits on the type of property you may purchase.
When to apply when moving for a Mortgage
It could be a good idea to talk to your mortgage lender if you’ve just started thinking about moving house, to find out how much money you could borrow if you wanted to move, and what fees you might have to pay. To help you make your decision, it is also worth talking to a mortgage broker. You can call our London & Country broker partner free of charge on 0800 073 2310.
Comparison of mortgages when you go back home
You will help find the best moving house mortgage rate for your new home by comparing mortgage quotes on Money Super Market’s mortgage comparison tool. Choose ‘home purchase’ from the mortgage form dropdown to compare various providers’ example mortgage quotes.
You would be able to see the monthly moving house mortgage repayments that you will have to make on each contract, and you will find more information on any additional transfer costs you will have to pay if you click on ‘Product Details’. The comparison tool doesn’t take your financial condition or credit history into account, so it’s important to note that your monthly repayments and deal rates could change when you apply for a mortgage in general and a mortgage offer. If you don’t keep up your moving house mortgage restitution, your home will be repossessed.