What To Consider About Home Mover Mortgages
What does Home Mover mean?
Homeowners with a current residential mortgage who are looking to move to a new property are known as Home Movers. The term Home Mover mortgages usually refers to either the Porting of portable residential mortgages or remortgages, which are known as product transfers, when you stay with the same lender. The type of mortgage product you will need depends on your circumstances and your reason for moving, however most people moving home will opt to Port their mortgages.
What is Porting?
Porting your mortgage is a process whereby you can retain your current mortgage deal, but apply it to your new property when you move home. Most modern mortgages are portable, but it’s worth bearing in mind that when you choose to port your mortgage, a new application will be carried out. It’s therefore important to consider your current financial circumstances, as applications to port your mortgage will be assessed similarly to your original application, so it’s possible for it to be declined.
Can I increase my loan amount when I port?
Some lenders will allow you to increase your borrowing when you port your mortgage, although this will depend on your ability to meet their criteria, they will need to assess whether you can afford the higher monthly repayments.
If this option is not available, they may wish you to take out an additional mortgage for the extra borrowing. This can result in you having two different mortgages with the same lender, each of which could have their own terms.
Can I decrease my loan when I port?
You will usually be able to decrease your loan if porting your mortgage to a lower value property, however, a decrease of more than 10% of your original loan value can result in fees to mitigate any losses the lender will make.
How do I know if porting is right for me?
Although most modern mortgage terms allow for porting, some will not and therefore it’s important to find out if this is an option for you, before you begin the process. If you are unable to port, you may find a suitable product transfer with your current lender or, if not, your only option is to remortgage when you move home.
Other things to consider is that you will have new arrangement and valuation fees to pay, as the application will essentially be repeated on your new home.
A Product transfer with your current lender will not necessarily mean that you won’t be liable to pay early repayment charges. It’s worth comparing this with the fees involved in remortgaging with another lender for a better deal.
When you decide to remortgage, timing can be a critical aspect of getting the maximum benefits from your decision. It’s important to contact Mortgage Brokers like ourselves for advice, before you decide to remortgage. We can go through your Home Mover options with you to determine your most appropriate move.
Does the value of your current or new home affect your options?
Due to the higher house prices involved with upsizing, this option will always be more challenging to port. If your circumstances have improved financially or you have gained significant equity in your current home, it will be much easier to meet the affordability criteria. Remember that it’s possible that you will also undergo additional credit checks when porting, if you choose to borrow more. If it’s necessary to improve your score, it’s advisable to do this ahead of your application.
If you have low, or particularly Negative Equity (owe more than its current value) lenders are unlikely to accept applications to port your mortgage to a similarly priced property or more expensive one. In some circumstances it may be possible to downsize to reduce, but the fees associated with a reduction of more than 10% of your loan should be considered.
How can Assured FG help find you the most appropriate deal?
At Assured FD our mortgage and protection advisers can help you to decide which Home Mover option is right for you. We will assess your personal details and existing mortgage terms and advise you whether Porting, a Product Transfer or Remortgaging would be right for you. If you do decide to change lenders, we can help find those who will offer you the most competitive deal, whilst supporting you throughout the process to ensure a smooth transition into your new home.
Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.