Daniel Condren explains the mortgage process and what is involved if you are moving house. 

What moving costs do you need to consider as a home mover?

There’s quite a lot to consider. First of all, how much your house is worth and how much equity you have in that property. Often our clients are unaware of the total amount of equity they have, and it has stopped them from wanting to move.

It’s important to remember that when you’ve had a mortgage for five or ten years, the debt has been reducing. Property prices have gone up and interest rates are still low. Many people miss the opportunity to get a bigger bedroom or garden by buying a larger home. Not everyone realises that the equity in your home could go towards the deposit on your next house.

Stamp duty is another important consideration. This is the government tax on property. There will also be an estate agents’ fee to market and sell your property. You might be concerned about how much this will all cost – but I always remind customers not to worry, that all these costs will come out of your equity. You don’t need a large sum of money in the bank.

A mortgage broker will help you understand how much your property is worth, the mortgage, your equity and all the costs of moving. There may also be broker fees for the advice, which is payable once you make the application and put your property on the market. It’s always free to speak to a mortgage broker in the first instance.

How will a broker help?

We’ll help you explore how much you can afford to borrow by looking at your income and outgoings. It’s important to say that when you buy a house as First Time Buyers, you are usually lower on the career ladder, and haven’t been working so long.

Now, you are likely to be earning more money or have been promoted. Or perhaps you have a new partner on the mortgage which means you can combine your incomes.

People are often surprised to find they can move a two-bedroom terrace to a three or four bedroom semi-detached or detached home. Whatever your plans, it’s good to understand your position. At the moment not many houses are coming onto the market but once you know that information you can consider all your options.

What deposit do I need and how much can I borrow?

The bigger the deposit, the better deal you’re going to find. If you’re moving home, your equity is your deposit. If you’ve been in the house for 10 years and have reduced the mortgage, the likelihood is that you’ve got a big chunk of equity.

A 10% deposit is a good starting point. 15% gets you an even better deal, and if you’ve got 25% and above that will get you an excellent mortgage.

How does my mortgage affect my plans to move?

What I advise all my customers is to understand your long term plans. For example, it wouldn’t make sense to get a new fixed mortgage for five years and then, six months later, decide you want to move. That could mean you have to pay a large early repayment fee on your mortgage.

So make sure you know the anniversary of your mortgage deal, whether it’s a two year deal, three, four or five years. Try and keep it in line with your plans.

Some people don’t have mortgages and have what’s called unencumbered property. They can still move to a bigger house as they’ve got all that equity. The opposite situation is where you might want to downsize to a smaller property. Whatever the situation, we can help you understand what the mortgage would be and what your options are.