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What is a Home Mover Mortgage?
Home Mover Mortgages are used when you are considering moving to a new home. This is most commonly done by “porting” your mortgage to the new property, however, in certain circumstances, it can be more beneficial to remortgage.
What is Porting?
Porting is a commonly used process whereby you can transfer your existing mortgage with you when you move to a new home. Most modern mortgages are set up to allow for this, however, depending on the type of mortgage, the terms and conditions may not allow you to port your mortgage.
Porting your mortgage essentially requires a new application process to be carried out for your existing mortgage, on your new property. This is to ensure that you are still able to afford the monthly repayments and that you still meet the lender’s criteria. If your financial circumstances have deteriorated since your original application, you could have your application to port turned down.
Early repayment charges are sometimes incurred when you port your mortgage, although lenders will sometimes waive these to encourage you to stay with them rather than remortgage with another lender. You should also expect to pay other application fees and a valuation fee on your new property, similarly to your original mortgage application.
Can I increase my loan amount when I port?
If you’re moving to a more expensive property, some lenders may allow you to increase your borrowing when you make an application to port your mortgage, although this will depend on your individual circumstances.
When lenders do not offer the option to increase your current borrowing, they will usually require you to take out an additional mortgage to cover the additional cost of your new home. This means that you could end up with two separate mortgages from the same lender and the interest rates and repayments on your mortgage will differ between the two.
Can I decrease my loan when I port?
It’s usually possible to decrease your loan when you opt to downsize to a lower value property. Reducing your borrowing by up to 10% is usually possible without incurring charges, although if the drop is more substantial than that, you may have to pay off your existing loan in order to compensate for the difference in interest and charges.
How do I know if porting is right for me?
Before you apply to port your mortgage, it’s important to consider whether you will meet the criteria for the mortgage at the current time, especially if you are upsizing to a more expensive property.
You may find that you don’t have the option to port your mortgage. You may be able to take a product transfer with the same lender or remortgage with a different lender to accommodate your move under these circumstances. We can help you to decide which option will be most beneficial to your individual circumstances.
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Does the value of your current or new home affect your options?
The current value of both your existing home and your new property can have a substantial effect on your Home Mover Mortgage options.
You will find it easier to port your mortgage if you have achieved a significant amount of equity in your home, as lenders will be more likely to approve your application to port. It will also give you access to more competitive interest rates. This is particularly useful if you are moving home to upsize to a more expensive property.
If, on the other hand, you have fallen into Negative Equity, your options will be limited by this. Negative Equity occurs when you owe more on your property than it’s current value and in these circumstances, an application to port to a property of equal or greater value is unlikely to be approved. Downsizing may be an option for some people with little or no equity, however, you should consider the early repayment fee that will be involved, as well as the fees that become payable when your borrowing is reduced by more than 10%.
How can Mortgage Advice Centre Mortgage Advisers help?
At Mortgage Advice Centre our Mortgage advisers specialise in helping Home Movers to both upsize and downsize into their new dream home. We can have a detailed look into your current mortgage deal and financial circumstances to help you establish what your most beneficial options are. Having access to a significant portion of the Home Mover deals available across the market also allows us to find you the deal that will most closely match your needs.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.