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Home Mover Mortgages – Choosing the right option for you
Moving house involves making a lot of important decisions, including how you will approach mortgaging the new house, and Rebus can help you explore your options for a Home Mover mortgage.
What does Home Mover mean?
There are three main types of residential mortgage customers: First Time Buyers, Home Movers and Remortgages. As a Home Mover, you will need to exit your current mortgage deal and take out a new one – but there is also the option to ‘port’ your existing mortgage to the new house.
What is porting?
Porting is the process of transferring your existing mortgage to a new property. It means you stay on your current mortgage deal even though you are moving home.
Porting can seem simpler than remortgaging, and one advantage is that you can often avoid an early repayment fee. These can apply when you exit your deal early and can be as much as 5% of the overall loan.
On the negative side, with porting there can still be arrangement fees and valuation costs, and the lender will reassess you against their affordability criteria. Your application can also be refused, especially if your earnings or credit rating have changed since you took out the mortgage.
Can I increase the mortgage size when I port?
Sometimes you can increase the loan amount when you port, especially if you’re buying a property of a higher value. Whether this is possible will depend on the lender’s criteria and your financial situation.
If this isn’t an option, some lenders will let you port but ask you to take out a separate mortgage for the additional amount. It means you will have two different mortgage products with the same lender.
Can I decrease the loan when I port?
Downsizing to a smaller property usually means that porting is more straightforward. Most lenders will agree to this, but be aware that if the mortgage amount decreases by over 10% you might need to pay an early repayment charge.
How does the value of my current home affect my options?
Your mortgage options are generally positive if you have good equity in your home. You will usually have good equity if you have paid off a decent amount of the mortgage or the property has gone up in value. A lower Loan to Value ratio gets you better interest rates and a wider choice of lenders.
If you have low or negative equity, where you owe more than your home is worth, lenders are less likely to let you port your mortgage, unless you’re downsizing.
What impact does the value of the new home have?
If you’re moving to a more expensive home you’ll need to meet the lender’s affordability and credit scoring criteria for the new loan amount. Meeting these guidelines applies both when you port and when you remortgage.
It’s helpful to use a mortgage calculator early in the purchase process to see what your monthly payments will be to make sure they are affordable. Downsizing to a smaller home is generally simpler, as you aren’t borrowing any additional money.
How do I know if porting is right for me?
Talk to your lender about whether porting is an option on your mortgage deal, and find out what this would involve. Then you should carefully consider all the options across both porting and remortgaging.
You need to look at early repayment charges, arrangement fees, monthly repayments and mortgage rates, which can be complex – but a Mortgage Broker can do all this for you.
How can a Mortgage Broker help with a Home Mover mortgage?
Rebus is here to make moving home simpler. We’ll talk to you about your specific situation and property goals, and explore the lenders and products that will be most suitable for you.
Our mortgage advisers can then get you an Agreement in Principle from a suitable lender, which is helpful when you make an offer on a new property. We will then support you through the mortgage application process at every step until your purchase is complete.
We are fully authorised and regulated by the Financial Conduct Authority and our registered office (our registered number is 11818481) in Peterborough is open Monday to Friday. Get in touch today to see how we can help you.
Your home may be repossessed if you do not keep up repayments on your mortgage.