Home Mover Mortgages
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Home Mover Mortgage
Gary Boakes talks us through home mover mortgages.
What do we mean by home mover mortgages?
A home mover is someone who is looking to move home. They already own a property, so they might be selling one property to move to another one. It’s an industry term, like First Time Buyer – it just means that you’ve owned a property in the past and you’re looking to make a new purchase.
The actual product is a standard mortgage. The main thing here is that as a home mover there are more things to consider, because you potentially already have a mortgage.
What moving costs need to be considered as a home mover?
Probably the major one is your deposit. Like any mortgage or any property purchase you’re going to need a deposit. The good thing about being a home mover is that hopefully you’ve built up equity in your property to help with that deposit – or you might have savings behind the scenes.
The second one will be estate agency costs. These can vary quite dramatically depending on who you approach. We’d always recommend that you approach at least three estate agents to give you a good idea of the value of your property – and also to get an idea of costs. Don’t take what they tell you as standard, you can negotiate on those fees.
Next you’re going to require a solicitor to do the transaction, and these vary by firm, the level of service and the speed that you want to move at. The big solicitors firms may well be a little bit slower but cheaper. For a more personal touch with someone at the end of the phone, who will move quite quickly, you may have to pay more. But it’s worth shopping around and your mortgage broker or estate agents will probably recommend some people as well.
Stamp duty is another big one and will be payable on your new purchase. Here at Verve, we’re not tax specialists but we can give you a good idea of the stamp duty costs and we can give you ideas of who to speak to about tax issues.
Once you’re ready to move you’ve got removal costs. You could just hire a van yourself and have the pleasure of lifting wardrobes upstairs, or get professionals to come and do it for you. Costs are very dependent on the sort of package you want. You can actually get people that do everything for you – including wrapping, packing and unloading on the other side.
If the property chain breaks you may need to put items in storage for a while, and there are costs for that. You will also need to pay for a survey on the property. You’ll get a basic valuation with the lender to give an idea of the price. But to understand the condition of the property and have a few things checked there are usually additional costs for that as well.
So there are quite a few things to consider with moving home, but we can help you with all those. We will guide you to people to speak to and recommend companies that we have worked with before.
How much can I borrow?
It works the same way as with your first purchase. The total you can borrow will be based on your affordability, your expenditure and your circumstances. It will differ for a family to a single person, and it will vary depending on your income and commitments.
Speak to a mortgage broker to get a clear idea of how much you can borrow. There’s a bit of a misconception that when you move property that you can simply take your existing mortgage with you when you move. We’ll discuss that more in a second, but you still have to prove you can afford the current mortgage.
Your circumstances may well have changed in the time since you bought that property. That may be good, it might be bad. So we will check your affordability based on your specific circumstances.
How we can help you
No matter what stage in life you’re at, our expertise will help guide you along the way. We’ll take the time to understand you, your aspirations in life and what you want to achieve in the short, medium and long term. Our team of experts are on hand to help people all over Wiltshire and the surrounding areas, from our Salisbury office.
We want to give you peace of mind, knowing that no matter what happens, you’ll enjoy a financially secure future.
What is porting?
Porting is transferring your existing mortgage to a new property. So if you have a Santander mortgage, for example, you may have the ability to take that Santander mortgage with you to the new property.
Can I increase the mortgage value when I port?
Yes. Let’s say you have a £100,000 mortgage – you take that with you at the existing rate and then any additional borrowing is separate. So if you want a mortgage for £150,000 then the additional £50,000 is a new product.
The whole £150,000 will be taken into account for affordability. So the lender will need to check that your circumstances enable you to borrow the full amount.
So yes, you can increase your borrowing. The port is more about moving your existing mortgage with you.
Can I port my mortgage if the new home is cheaper?
Yes, but we would need to discuss that to find out if any penalties might apply. If you are paying off part of your mortgage as part of the move then we would have to double check the rules.
We’d look at the early redemption charges on your current mortgage, to see whether or not there might be a penalty to do so, and if that was cost effective. But yes, you can port your mortgage if you are buying a cheaper home.
How do I decide whether to port or get a new mortgage? Is porting a mortgage worth it?
In most circumstances porting is worth it. You don’t have to pay any early redemption charge on the current mortgage and also, especially at the moment, you might potentially have a cheaper rate than what’s available on the market. So you could bring that rate to the new property.
It’s our job to determine if this is the right option for you. In most circumstances our customers do port their mortgage, but we have had some clients over the last 12 months who have paid their early redemption charges and left their lender.
It could be based on the type of property they wanted to buy, or the affordability wasn’t right with their lender. It will depend on your circumstances but in most instances it is generally more cost effective to port.
How does the equity in my home affect my options?
It hopefully improves your options, depending on the equity you have. Ultimately, if you have no savings available to you, your whole house buying process is going to be done with the equity in your property.
We talked about the moving costs, deposit, stamp duty, legal fees etc earlier. If you have no savings and the equity is going to be needed for those costs, it’s all about weighing up whether you have enough deposit to fund the ongoing purchase, given the other costs and your current equity.
What else do we need to consider when moving house?
It’s all about preparation. There are three key things that you need to know when you move. First, is what your house is worth. That then gives you an idea of what equity you have and the money you can play around with.
The second is what you can actually afford – your actual mortgage capability. What does that look like on a monthly basis? Are there any additional costs that I’m going to come up against?
After that you need to see whether there are good properties available in line with your budget. Say you’ve found out you’ve got £50,000 equity. You can get a mortgage of £150,000 – are there properties for £200,000 that suit your circumstances?
We can guide you in all three of those areas. We can recommend estate agents to speak to, give you an idea of what you can buy and how much it would cost on a monthly basis. So come along for a chat and we can start looking at achieving your next move.
Your home may be repossessed if you do not keep up with your mortgage repayments.