Moving house with a mortgage
Moving house with a mortgage can be confusing. Many people wonder what their obligations are when they want to move house but already have a mortgage on their current property. If you’re wondering if you’ll be able to keep your existing mortgage when you relocate, read on. At Darvills of Leeds, we can help if you’re seeking removals and removals companies in Leeds & Wakefield.
Can I simply transfer my current mortgage to a new property?
Your current mortgage is secured on your existing property. When you move house, your solicitor will pay it off in full with funds from the sale of the house. If you want to move house, you will often a new mortgage that you can secure on your next home.
Things to consider
Before you go ahead and make the leap to pastures new, you need to consider several factors. Is the mortgage portable so you can take it to another property? Does it come with early redemption penalties which will mean more expense? Will you have to borrow more to fund the cost of your new home? Perhaps there is a better mortgage rate available than what you’re currently paying? You also need to find out whether you’ll pay any penalties if you do move house when you still have a mortgage.
Chance are you have a deal on your mortgage rate. This could be a tracker rate, a fixed rate or a discounted variable rate. This is likely to be the case unless you’re on a standard variable rate. If you’re not on a standard variable rate, you will normally be contracted to the rate until it expires. You will need to pay early redemption penalties if you pay off a big sum during the term. Your early redemption penalty could be up to 5% of what you pay off.
More about early redemption penalties
You can normally avoid being penalised if you overpay your mortgage by a relatively small amount. If you’re not paying more than 10% of what’s left on your mortgage each year, you’re unlikely to face a penalty. If you decide to move whilst you’re still eligible to pay penalties, these will be incurred when you sell your home. Nonetheless, if your mortgage is portable you can apply it to your new home. Your solicitor will still pay off the mortgage. You’ll receive a rebate for any redemption penalties. You’ll still get the same rate as you were paying before for the rest of the term.
When can I port my mortgage?
In some cases, you’ll need to port your mortgage at the same time as the old mortgage is redeemed. However, your lender may give you up to six months between when the old property is sold and the new one is acquired. Redemption penalties will be charged when the existing home is sold but refund them around the time that you buy your new home. If you are moving to a more expensive home and need a bigger mortgage, your lender may let you borrow at the same rate. However, they may decide to lend the extra funds at a different rate. If you decide to change lenders further down line, you will then incur penalties.
Can I change lenders to get a better deal?
People change lenders for various reasons. Your rate may come to an end and you may see a better offer elsewhere. You may find that your existing lender’s criteria are no longer the right match for your circumstances. For instance, they may refuse to lend as much as you need. Also, they might not lend for the kind of property you want to purchase. Your mortgage application may be turned down if your lender feels they are taking a bigger risk.
What happens when I apply for a new mortgage?
Your lender will need to have the property valued and carry out new affordability checks when you apply for a new mortgage on a new home. Even though you’ll be starting a new mortgage, porting means that you’ll get the same rates, terms and conditions. The main advantages of porting a mortgage include avoiding early repayment charges. Keeping favourable rates and terms that you want to retain.
Is porting a difficult, drawn-out process?
The porting process is generally more straightforward than you might think. If you need a larger mortgage but already have the funds needed to cover the difference, this can save a great deal of hassle. You’ll have a greater chance of being approved, as your lender will have less risk to protect themselves against.
How can I meet the lending criteria?
Factors that will influence your lender’s decision include your current income, your credit history, the type of property you’re buying and your age. Your application could be declined if you’re seen as a bigger risk than you were when you first took out your mortgage. An experienced mortgage advisor can help you find the best deal for your current needs and circumstances.
Need help with removals in Wakefield or Leeds?
If you are ready to move home and have been searching for removals and removals companies in Leeds and Wakefield, we can help. At Darvills of Leeds, we have been providing outstanding removals services for over a century. We are fully insured. You’re covered if anything does go wrong during the moving process. We treat your goods with the utmost respect.
Hopefully, this has assisted you with the question of moving house with a mortgage. We’re happy to answer any questions that you might have in the run-up to moving day. You are more than welcome to get in touch with us at any time if you do have any queries about the services that we provide. Reach us today by sending a message through the site, by giving us a call on 0113 436 0318 or 01924 729084. We lead the way when it comes to removals and removals companies in Wakefield and Leeds.