Home Mover Mortgages

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Home Mover

Our MD Daniel Condren talks about Home Mover mortgages. Listen below

Home Mover Mortgage

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.

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What is porting?

If you are in the situation where you’re facing an early repayment charge, one option is to port your mortgage. This is essentially staying with the same lender and moving your current mortgage deal from your existing home to a new property.

Can I increase the mortgage value when I port?

Yes. Here’s how it works. The deal that you originally took out as a customer will still have the same expiry date. You would move and secure the mortgage on the new house. If you need to borrow more, that borrowing would be on a separate contract with your lender.

So you’d have two deals, which may end at two different times. It does get a little bit more complicated in checking when your deal comes to an end – which works well for the lender as it means you will stay with them for a long time.

How do I decide whether to port or to get a new mortgage?

It’s all about understanding the cost implications. As brokers we will explore the options and help you decide what’s best.

When you get a new mortgage with a different lender, remember that you can change the term and other material parts of the mortgage. You can borrow over a longer time or a shorter time, or change how long your fixed deal will last. Whereas if you choose the porting option, you are stuck with what that lender is offering. That can be a good thing, because you’re going to save money, but it can also be restrictive.

Another factor is that the lender might not allow you to port. They might not accept the new property or, if you’ve changed your job or had a credit issue, it may not be an option to stay with the same lender.

The good news is when you speak to a broker you can explore all the options from every mortgage provider. Just because your current lender says no, it doesn’t mean that there aren’t others that would say yes.

A final point to make is that some customers decide that paying the early repayment charge is worth it to get them their dream home.

What do I need to know when talking to a broker about moving home?

It helps to have a ballpark figure in your head on what your home is worth. You don’t have to get a formal valuation, just an idea of house prices in your area. We can work with that to explore your equity, potential purchase prices and how best to achieve your property goals.


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