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Moving from one home to another can be a stressful process. But arranging your mortgage for your new home doesn’t have to be. There are several options available to home movers with existing mortgages.
A mortgage adviser will be able to manage the mortgage process for you. To better understand what happens to your existing mortgage when you move, read more.
There are several options available to home movers when it comes to your mortgage.
Your current lender may allow you to transfer your current mortgage product to the new property. This is known as porting. If the cost of your new home is more than your previous one, you may have to apply for additional borrowing or a ‘top-up’ mortgage.
Depending on your circumstances, you may find it works better to pay off your existing mortgage and arrange a mortgage with a new lender.
A ‘portable’ mortgage means you may be able to ‘port’ your current mortgage product to a new property. It gives you the option to keep your current deal. If your current deal has a lower rate than what’s available on the market, you may want to consider porting your mortgage.
Although porting may sound like the most sensible option, there are no guarantees your lender will permit you to do it. Here are some of the reasons why it might not work out for you:
You must reapply for your mortgage, and you might not qualify. When you request to port your mortgage, you are effectively reapplying for that mortgage product. Although you initially qualified for the mortgage, there is no guarantee that you will again. This could be due to a change in your lender’s criteria or a change in your circumstances e.g. you earn less money or have accrued more debt or the new property is not deemed suitable for lending purposes.
You may not be able to borrow more. If the property you are moving to is more expensive, you may need to borrow more money. Your lender might not allow this if you are already close to your lending cap.
Some mortgage products cannot be ported. To move from your current home, your house sale would have to pay off the current mortgage or you would have to arrange a new mortgage.
If you are moving home, it could be the ideal time to search for a better mortgage deal. Many home movers will opt to arrange a new mortgage when moving to find a more suitable product.
However, there may be some penalties if you wish to leave your existing lender. If you consult a mortgage adviser, they will be able to investigate early repayment charges on your behalf.
Another thing to consider is the everchanging mortgage market. Mortgage rates may have changed since your initial agreement was arranged. An experienced mortgage adviser with good knowledge of the market will be able to advise on the best options for your circumstances.
Speaking to a mortgage adviser will give you a greater understanding of the options that are available to you. There is no one size fits all answer when it comes to mortgages.
To arrange your free initial consultation, please get in touch.