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Home Mover Mortgages – A Guide
What does Home Mover mean?
If you are living in a property with an existing mortgage but want to move to a new home then you will need to look at your options when it comes to your mortgage. You might want to move to a better location or into a bigger property or maybe you are downsizing, either way you will need to transfer your mortgage (port) or remortgage.
What does Porting mean?
Porting involves moving your current mortgage deal over to a new property, you will stay with your current lender and keep the same mortgage deal. Most lenders offer portable mortgages, but you will need to undergo another credit check and provide a valuation of the property you intend to buy.
You keep the terms and conditions of your mortgage deal when you port your mortgage and the interest rates too. If you move into a more expensive property however, you may have to borrow more at a higher interest rate. Your existing mortgage will be repaid through the sale of your current property and then a new mortgage will be taken out in your new property, with the same deal.
As you will undergo another credit check it is important to ensure that you have your finances in check before porting your mortgage. If you have missed any payments, especially repayments on your mortgage then it could mean your application to port your mortgage deal is declined.
It can be a good idea to port your mortgage if you have recently got a cheaper deal or lower rate and want to keep this but on a new property. You need to keep in mind that you may encounter some fees when it comes to porting your mortgage. For example, some lenders require you to pay exit fees from your current mortgage or early repayment fee upon paying off your existing mortgage.
Upsizing and Porting
Some lenders will not allow you to borrow more when it comes to upsizing as you may be close to the maximum amount you can borrow, or you may not have qualified the credit check. Lenders who do allow you to borrow more will likely charge a higher interest rate and arrangement fees will be charged upon your new mortgage amount, this is known as a ‘top up’ mortgage.
You need to be careful when it comes to borrowing more from your lender as with an additional top up mortgage you are essentially committing to making repayments on two different mortgage products. You will be tied to that lender for a good amount of time, so it is important to understand their terms and conditions. You may want to seek help from an expert Mortgage Adviser.
Downsizing and Porting
You will still need to pay valuation fees for the new property as they will want to know that the new property still fits the mortgage amount they have given to you. You may encounter early exit fees and repayment charges.
Equity and Porting
If you have a good amount of equity in your current property, then you will have a lower Loan to Value ratio meaning that your property is worth more than the loan. This will open more options for you when it comes to moving home and your lender is more likely to offer you competitive rates.
Negative Equity and Porting
It can be scary knowing that your property is in negative equity but you will still have options, Your lender may allow you to move our mortgage deal over but your negative equity will be transferred to your new property too. It means that you do not have to pay off the negative equity yet but very few lenders offer this option.
How can CD Financial LTD Mortgage experts help me?
It can be hard to know whether porting or to completely remortgage is the right option for you. CD Financial Mortgage Brokers can help explore your current financial situation and offer tailored advice when it comes to your options.
We are authorised and regulated by the Financial Conduct Authority meaning we are qualified to give advice and can access the independent mortgage market which can offer more competitive mortgage rates in some cases.
You will need to ensure that you can afford to move home as there are a lot of fees involved such as early repayments charges, exit fees and arrangement fees if you remortgage. Failure to keep up with monthly repayments on your mortgage can mean that your home may be repossessed and your credit rating will likely take a hit too. It is important to understand your options when it comes to home mortgages and moving home so get in touch with an expert mortgage broker at CD Financial today.