It is likely you will need or want to move home at some point. Maybe you and your family have outgrown your current home, or a new career opportunity forces a change in property location. Or perhaps, your children have grown up and left home and you want to downsize.
You are scrolling Right Move and Zoopla as you’ve decided you definitely need to move. But where does that leave your current mortgage?
If you are currently tied into your existing mortgage deal, it is likely you will have an early repayment charge or penalty to come out of the mortgage deal with your existing lender. However, that doesn’t mean you can’t move. In this blog, we will discuss what happens to your existing mortgage when you move, – so you can be informed, ready for the big move!
Can I take my existing mortgage deal with me to a new property?
The answer to this is yes, you may be able to transfer your existing mortgage deal with you to a new property. This is known as porting your mortgage. However, not all mortgages are portable.
You also need to be aware that even if your mortgage is portable, it is not guaranteed that your mortgage lender will allow you to transfer the mortgage onto a new property. You have to apply to your mortgage lender who will assess if you and your potential property fit their current lending criteria. Your porting mortgage application will be assessed for affordability based on their current criteria and not the criteria used when you previously took out your mortgage.
So my porting application may be declined?
Because you are applying for a mortgage, regardless of the fact you are applying to port your existing mortgage product, your mortgage application will be assessed as a new mortgage application. Therefore, it is possible that your porting application may be declined because it is deemed no longer affordable for you, or you no longer meet the mortgage lender’s own criteria.
A good mortgage broker will always consider if it is a viable and cost-effective option for you to port your current mortgage. They will consider if you fit the mortgage lender’s affordability and lending criteria. Porting may not always be the most suitable option for home movers.
What happens if I can’t port my existing mortgage?
If you are unable to port your existing mortgage deal when you move, then you may have to pay an early repayment charge to your existing mortgage lender if you are completing the sale of your current home before the date your existing mortgage deal ends.
You would need to apply for a new mortgage for the purchase of your new property, this may be with a different mortgage lender.
We would always recommend speaking to a mortgage expert such as The Mortgage Pride to ensure your new mortgage is the most suitable one for your personal needs and circumstances. As well as securing the cheapest mortgage deal for you, they will also ensure you meet the mortgage lenders’ criteria and affordability based on your individual circumstances. You can read more about the benefits of using a whole of market mortgage broker in our blog here.
What happens if the mortgage I need for the new property is greater than my existing mortgage?
If you are able to port your existing mortgage, your mortgage lender will only allow your existing mortgage balance to be transferred on your current interest rate. This means that if you currently have a mortgage of £100,000 and you need to borrow £150,000 to move home, you will likely need to borrow the difference on a new mortgage rate, usually with the same lender. The only exception to this is if you are on a flexible mortgage.
If you need to borrow less than you currently owe, then you may have an early repayment charge to pay on the amount of mortgage you are repaying.
If you are thinking of moving home, The Mortgage Pride are mortgage experts based in Stoke-on-Trent, Staffordshire. Taking your financial needs and goals into consideration, we can guide you safely through the process of a moving house with an current mortgage. With access to over 100 mortgage lenders and over 19 years of experience, you can be confident you are in safe hands. Let our Pride look after yours!
Wanting to get more advice about a moving house when you have an existing mortgage? Get in touch with us at The Mortgage Pride today.
Also have a look at Remortgage Staffordshire
*Your home may be repossessed if you do not keep up repayments on your mortgage.