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Home Mover Mortgages – finding a good deal
When you are looking to move house there are a lot of important decisions to make. One of them is how you will approach mortgaging the new house. Fancy a Mortgage is here to help you explore the options for a Home Mover mortgage.
What does Home Mover mean?
In the world of mortgages, customers are classified as First Time Buyers, Home Movers and Remortgagers. For Home Movers, the main options when you’re moving house are porting your existing mortgage or taking out a new loan.
What is Porting?
Porting is transferring your existing mortgage to the new property. It means you stay on your current mortgage deal even though you’re changing properties.
Although it sounds simpler than remortgaging, porting still requires you to reapply for the mortgage. That often means there are arrangement fees and valuation fees, and you will also need reassessing against the lender’s affordability criteria.
Your porting application can also be refused, especially if your earnings or credit rating have decreased since you took out the mortgage.
An advantage of porting is that you can often avoid an early repayment fee. These can apply when you exit your deal early and can be as much as 5% of the overall loan.
Can I increase the mortgage size when I port?
It is sometimes possible to increase the loan amount when you port, which is useful when you’re moving to a more expensive home. Whether this is possible depends on the lender’s criteria and your financial situation.
The alternative is that the lender will want you to take out an additional mortgage to extend the loan. In other words, you will have two different mortgage products running with the same lender.
Can I decrease the loan when I port?
It’s usually simpler to port a mortgage when you are downsizing to a smaller property. Most lenders will agree to this, but if the mortgage amount decreases by more than 10% you might need to pay an early repayment charge.
How does the value of my current home affect my options?
Your mortgage options are generally good if you have a lot of equity in your home – perhaps you have paid off a good proportion of the mortgage or the property has gone up in value. With a lower Loan to Value ratio, you’ll get better rates and a wider choice of lenders.
If you have low or negative equity, where you owe more than your home is worth, lenders are less likely to let you port your mortgage, unless you’re downsizing. Even with a remortgage you will have fewer lenders to choose from, and rates will be higher.
What impact does the value of the new home have?
If you’re moving to a more expensive home you’ll need to meet the lender’s affordability and credit scoring criteria for the new loan amount. This is the case whether you port or remortgage. Good equity or an increase to your household income will be helpful in securing you the loan.
Downsizing to a smaller home is generally simpler, as you won’t be borrowing any additional money.
How do I know if porting is right for me?
The first step is to talk to your lender about whether porting is an option on your mortgage deal. Then you will need to carefully consider all the options, exploring both porting and remortgaging.
This can be complex, especially when you need to take into consideration early repayment charges, arrangement fees and mortgage rates. Many people choose to get a Mortgage Broker to help.
The most important thing is that the monthly repayments on your mortgage are comfortably affordable, as your home may be repossessed if you fall behind.
How can a Mortgage Broker help with a Home Mover mortgage?
Our mortgage advisers are here to make moving home simpler. We will explore your specific situation and property goals and explore the lenders and products that will suit you best.
Once you have agreed to a suitable mortgage deal we’ll get you an Agreement in Principle, which will help you make an offer on the new property. Once your offer is accepted we’ll support you through the mortgage application process and at every step until the purchase is completed.
Your home may be repossessed if you do not keep up repayments on your mortgage.