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Home Mover Mortgages – What You Need to Know
A home mover mortgage is slightly different from your first mortgage. A home mover mortgage refers to the agreement made for a new property. You can make a new agreement with your current lender, find a new lender, or, port your mortgage.
What is Porting?
Most mortgages today have the option of something called porting. Porting is when you move your existing mortgage, with the same rates over to a new property. The process is usually a simple one if your property is equal to or less than the price of your existing home.
When it comes to buying a more expensive property there are a few things to look out for. Some lenders will offer a second mortgage to cover the price difference.
This new mortgage loan will probably come with a different interest rate. It may also require a further administration fee and be subject to different regulations.
Should I Remortgage With My Existing Lender?
One option is to remortgage your property with your existing lender. This is straightforward but may not be the cheapest option available to you. There are benefits of staying with your new lender, for instance you may not need to undergo a credit check as your lender is already aware of you. Existing lenders do not always offer the most competitive deals and it is worth seeking some expert advice to guide you to the right mortgage deal for you.
Your existing lender will cancel your mortgage loan and set up a new one for you for the new amount. To cancel your current mortgage, your lender will require an early repayment of between 1 and 5% of the total value of your mortgage.
The nearer you are to the end of your current term the less you will pay in fees. If you are on your provider’s standard variable rate, you may not have to pay an early repayment fee.
Remortgaging With a New Lender?
It’s possible to cancel your mortgage with your current provider and remortgage somewhere else for a different amount. You may want to move home for several reasons, including upscaling or home improvements.
New mortgage deals appear on the market regularly, if you are not fixed rate deal or discount rate deal then it is always worth checking the market for better available interest rates.
Although you may find a new lender that offers a better deal than your current one, it is worth bearing in mind what leaving your existing lender will entail. Normally your existing provider will require an early cancellation fee and exit fee. On top of this, your new lender will require a look into your credit scoring.
You could use your new mortgage to pay off your old mortgage or benefit from selling your home if house prices have risen. If house prices have fallen and you find yourself with negative equity, you may need a bigger loan. Timing is something to consider when seeking to remortgage because the mortgage market is always changing. If you are not sure it is worth seeking advice from a mortgage broker.
How Can a Mortgage Broker Help?
When thinking of changing your mortgage, there are many options and factors to consider. Based on your circumstances, it may be in your interest to wait until your fixed term ends to go onto a variable rate and avoid the early repayment charge.
If your new property is of a similar value to your old one then porting could be the best option for you. By doing this you may avoid additional loans and arrangement fees. If you have strong equity, signing up to a new lender might be beneficial.
A mortgage broker can help you assess your options based on your current circumstances. Not only this but they also know mortgage markets and can seek out the right mortgage for you. It is always worth consulting with a broker first before you make a new mortgage application.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE