Home Mover Mortgages
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What do we mean by home mover mortgages?
A home mover mortgage is for someone who currently owns and lives in a property and is looking to move to a new property. Usually that can be done simultaneously – i.e. you sell your property and move into the next one on the same day.
In some cases the first property has to be sold before the buyer moves into their next home. But essentially a home mover is someone who owns and resides in a property and sells it to purchase a new property to live in.
What moving costs need to be considered?
- The deposit. A deposit can fluctuate between a minimum of 5% of the value of the property up to 90% of the property price, depending on the situation.
A higher deposit typically results in more competitive rates and leads to lower mortgage payment.
- Estate agent fees. These only apply when you’re selling a property, through an agent. It varies depending on location and the type of service you choose. We recommend that you get three or more quotes and compare the service on offer.
- Legal costs. Later on in the process you’ll need a solicitor and again, it’s best to compare costs and differing services. We do have a panel of conveyancers that we can recommend to you.
- Removal services. You may need to hire a van or a full removals team. The cost varies depending on how involved you want to be. Our friends at Just Move In can help you with finding a suitable provider – and Just Move In’s help is free as part of our service. Ask you adviser for more information or read more here.
- Storage. Buying and selling a home doesn’t always happen simultaneously. If there is a gap in the middle that means you will be moving in with friends or family or renting, you may not have space to store all your belongings. Storage costs vary depending on the length of time required and how much you need to store.
How much can I borrow as a home mover?
This is something that is influenced by a number of factors, including but not limited to your income and the value and type of property you wish to purchase. Speak to a professional because we will explore your specific situation and needs. We understand the market and lenders’ willingness to lend more or less varies constantly, so discussing your circumstances with a professional is the best way to understand the maximum you can borrow.
For some borrowers, achieving that maximum loan amount is essential – they are perhaps looking to buy as big a property as they can. For others it’s about maximising their borrowing within a set budget. A professional will give you all the answers to that. Here at Mortgage Marketplace that’s something we do daily.
What is porting?
Porting is moving your mortgage from property A to property B. Property A would be the one you’re looking to sell. Property B would be the one you plan to purchase and reside in the future.
The terms and conditions of your current mortgage remain the same if for the loan amount you are looking to move across to the next property. For example, if you have three years of a five year fixed deal left, you move that across and nothing has to change, provided everything is acceptable to the lender, who would treat this as a new application.
There are pros and cons to porting, as with anything. People who are upsizing, for example, may need to borrow a little bit more. That’s possible, as long as the mortgage provider is willing to lend that extra amount of money on that property. Every lender is different with regards to how much they’re willing to let you borrow.
If you’re porting to a more expensive property you need something called a ‘top-up’ or ‘further advance’. Some lenders may not be willing to lend you that required amount – in which case porting may not be a suitable option. Instead, you may need to talk to a different lender.
Again, speak to a professional and we’ll outline the pros and cons.
Can I increase the mortgage value when I port?
That falls into additional borrowing.
When people port, the terms and conditions remain the same. If you owe £200,000 on your mortgage on property A, you’ll still owe that amount when you move to property B, provided the lender assesses the application as affordable and acceptable.
If you need to borrow a little bit more to purchase that new property, then you will need to apply for the increased borrowing you require and the lender will need to ensure the new loan amount is affordable, based on their criteria at that time.
Can I port my mortgage if the new home is cheaper?
Yes, this is possible. You can generally keep the same terms and conditions for the amount you require, based on the property value and your needs, however, you may need to pay an early repayment charge over the amount you no longer require and will be in effect overpaying.
How do I decide whether to port or to get a new mortgage?
A professional will be able to answer that for your unique circumstance. There are pros and cons to porting. You may keep a better interest rate, but it may mean that you can’t borrow as much as you need – which might be a deal breaker.
On the other hand, it may mean that moving is affordable because your monthly payments are a lot less than what they would be with a different lender.
It totally depends on your individual circumstances, the products on offer and what the early repayment charge would be. There are lots of variables. The bottom line is that you should speak to a professional and we’ll point you in the right direction.
How does the equity in my home affect my options?
For those that don’t know, your equity is the difference between what the value of your property is and your mortgage balance. That bit in the middle is what you own, that’s the equity in your property.
That money can be used for the deposit on your new home and you take a mortgage for the outstanding balance.
If stamp duty is payable, you could take that from the equity in the property if you wish. That way it’s not necessarily a cost to budget for – it can just be removed from the equity. But that does mean you are reducing your deposit.
You can also use just part of the equity. You might choose to use a percentage of it because your circumstances have changed and you can now get a bigger mortgage. If this is affordable, you can keep an amount of your equity for home improvements or to consolidate debts. It’s your money, so it’s totally up to you.
How can a mortgage broker like Mortgage Marketplace help home movers?
A professional mortgage brokers like Mortgage Marketplace will go through the pros and cons with you and advise on the options. Everything is specific to your circumstances and what will be beneficial to you and help you achieve your goals.
We’ll recommend the most suitable product for you, and make sure the monthly payments are affordable. We can also recommend solicitors and other professionals that you may need. Solicitors can be a significant part of the process, especially if there are problems. Legal concerns can cause big delays and people can sometimes lose properties because of timescales.
Working with us can take some of that stress away. Instead of you having to deal with the lender, the solicitor and other people in the process, we have a team of people who do this all day, every day and will assist you with any issues. We know how to push things through as quickly as possible.
Finally, we work with a company called Just Move In. We can instruct them on your behalf and they will research and arrange all the things that people don’t like about moving house – changing utility providers, moving your broadband, your council tax, phone contract, arranging removals people, and more. Again it’s just something that takes away some of the stress.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Frequently Asked Questions
Call us today on 0800 170 7021 to discuss your borrowing potential and eligiability.
Typically, the mortgage process will take 2-6 weeks to reach approval.
A mortgage offer is usually valid for 6 months.
Please be aware, the process is currently taking longer due to Covid-19. Please see question ‘How has Covid-19 affected the mortgage market?’.
Whilst you are not required to take out a life cover, our job is to ensure your mortgage is affordable, no matter what. It may not be nice to talk about, but if something were to happen to you, you want to know your family and investment are safe.
We will advise on all the options available and provide a no obligation quote from our partner providers.