Home Mover Mortgage

What are the eligibility criteria for a mortgage as a home mover?

Broadly speaking, it’s simply to be a UK resident. If you’ve already got a property here, you’re already a UK resident. So that’s number one.

Number two is having some sort of income – whether you’re self-employed, employed, you have multiple jobs or a combination of those. We need to understand where someone’s income is coming from.

Then it’s around debt – your eligibility can change depending on the amount of debt you have. Having a car on finance or a balance on a credit card can impact whether a lender will lend money or not.

The last requirement is the really expensive one – children. Lenders will always ask if you have dependents. Having a child or an adult depend on you can also impact your eligibility criteria with certain lenders.

How can I borrow more money on a mortgage if I’m moving home?

Often someone has a mortgage and they want to sell their house and buy a slightly more expensive or larger property – which inevitably costs a bit more.

Let’s say, as an example, you had a £100,000 mortgage with a particular lender, but you need to move home and borrow an extra £100,000 to make it £200,000 in total. That’s entirely plausible. Lenders will let you take your mortgage with you and borrow on top – ultimately increasing your mortgage balance to help you buy a new home.

What is porting a mortgage? How does it work?

Porting is one of those mortgage terms that we hear a lot. Generally, it just means transfer. You might have a mortgage today on a house at a certain rate – you can transfer that to a new property.

You might be fixed into that deal for three or four more years, but it doesn’t prevent you from moving. You can port or transfer that mortgage to your new property.

Can I move house without changing my mortgage?

Yes – this is again the option to port. As an example, you might have a fixed rate mortgage with six months left. Instead of trying to port it across, we might just apply for a completely new mortgage. It might be cheaper for you to have a new deal with a different lender.

It really depends on the circumstances. While you can move without changing the mortgage, it depends whether you’d actually want to – it may be cheaper and better for you to change it.

But if, for example, you are fixed in, you’ve got three years left and it would cost you a fee to break that mortgage, we can transfer it across. Then you don’t have to change your deal or pay any onerous fees.

If I move home, will my new mortgage duration have to be shorter?

No – it doesn’t have to be shorter. Let’s say you had a mortgage with 20 years remaining on it and you transfer that to a new home. You can keep that 20 years the same, but you also could make it longer or shorter.

It would all depend on whether that would benefit you. Sometimes making the term shorter and paying a little bit more each month could save you a lot of money over that mortgage term.

It’s definitely a consideration – something you’d want to talk about as part of the process. You could also make the term longer, reducing the monthly cost, as long as you meet the usual eligibility criteria of not going past your retirement age.

Could I end up paying more on my mortgage as a home mover?

In theory, yes. If you needed to borrow more money, you could ultimately end up paying more to cover that larger mortgage. If you make the term longer, you can also end up paying more in interest.

Again, it’s one reason why it’s good to have a conversation very early in your potential move journey. As your mortgage broker, I’d ideally want to speak to you before you find your new home – we can then see what might it cost to buy a property at a certain value. That helps you plan the sort of property you might want to buy.

What fees will I pay when taking out a mortgage as a home mover?

You generally will have an arrangement fee whenever you take out a mortgage – even if we’re just porting it across. The fee from the lender can range from perhaps £495 all the way up to £2,000 in some instances. The average is probably around £1,000.

Lenders normally allow you to add that to your mortgage, so it’s not necessarily something you have to pay upfront. But you will pay it back in your monthly payments that way.

You won’t generally have valuation fees, as most lenders nowadays will cover the cost of that. However, we would always tend to say that if you’re not buying a brand new home it’s always a good idea to have a more detailed survey done.

Those can range anywhere from £500 all the way up to £1,500, depending on the level of survey you go for.

The other fees include solicitors – both to sell your home and to buy the new one. When you first buy a property, you just pay for some conveyancing for the purchase, but as a home mover it costs you slightly more. You have to pay for that solicitor to manage the sale process and liaise with the solicitors for the people buying your home.

You’ve demonstrated throughout the episode how a mortgage broker can help. Is there anything else you’d like to add?

As a broker we like to speak to people as early as possible. People are often concerned about the costs involved, and we will speak as many times as is needed. It wouldn’t be unusual for me to have a conversation with you four, five, six times or more before you actually move.

That’s absolutely fine – we want to talk about all of the things we’ve covered in this episode: the fees, the property type… everything that can impact the mortgage terms.

So if you’re looking to move home, speak to us as early as you can in that process to get all the options and understand the numbers before making any big decisions.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.