Home Mover Mortgages – what to look for

Already own a property and thinking of moving home? It can be challenging to know what to do about the mortgage. Should you stick with your current lender or find a new deal?

What does Home Mover mean?

A Home Mover mortgage isn’t in fact a specific product. Instead it describes your situation. It refers to anyone who owns a home and is seeking a mortgage to buy a new home, whether larger, smaller or of similar size.

As with any mortgage, your first step is to find out how much you can borrow, and make sure you can comfortably afford the monthly repayments.

What will a mortgage lender offer me when moving home?

Generally, mortgage lenders will offer you around four and a half times your salary. You will also need a deposit – more than 10% is common, but if you can stretch to 20% or more you’ll be a more appealing customer and potentially get a better interest rate.

Ideally, you’ll have some equity to put towards the deposit. Your equity is the difference between what your current home is now worth and the size of the mortgage left on it.

Porting your current mortgage

One option when moving home is to ‘port’ your mortgage over to the new property.
You will still need to apply in writing and possibly pay an arrangement fee.

If you’re moving to a more expensive home you may need an additional loan, with higher interest rates. Porting can seem less hassle than getting a whole new mortgage, but do check that your lender’s offer is competitive against a new deal.

Remortgaging with your existing lender

Another option is to take out a whole new mortgage with your current lender. If you’ve been a good customer they might offer good rates. But you might face early repayment charges and fees that could add up. Check what these costs are in advance.

Taking out a mortgage with a new lender

You might find that you can get better mortgage deals with a new lender. Again, you might find there are arrangement fees, valuation fees, and potentially an early repayment charge on your current mortgage. Shopping around and comparing deals will usually save money.

Upsizing

Upsizing is where you move to a more expensive property. When you sell your current house, you use the proceeds to pay off your mortgage. You then use the leftover funds (your equity) as the deposit for the new property and take out a new mortgage on the rest of the value.

Downsizing

Downsizing is moving to a smaller, cheaper home. It’s common among older people who no longer need so much space for their families. People often downsize to release equity and boost retirement funds.

You sell your home and use the proceeds to pay off any remaining mortgage. The money left over is yours to keep.

Negative equity

Negative equity is a bad situation for homeowners. It means that your home has reduced in value since you bought it – and selling it won’t cover the outstanding mortgage. In this situation it’s difficult to get a mortgage for a new home.

You may have some options in this situation, depending on the details, so seek professional advice.

Tips for Home Movers

There are a few ways to save money when moving. Fixed rate mortgages often have early repayment charges, so if you’re planning to move and you’re near the end of your fixed mortgage term, let it lapse instead of taking out a new deal. You’ll move to the lender’s standard variable rate (SVR) – which won’t be competitive but usually means no cancellation charges.

If you’re planning to make home improvements once you move, look at adding the cost to your new mortgage. It will cost less than taking out a loan or using credit cards once you move.

Moving home is complicated and stressful, so plan carefully. Write a moving house checklist of everything you need to do as your move date approaches. Include everything from booking your removal company to cancelling your utility providers and taking meter readings.

How can a mortgage broker help?

A Mortgage Broker can take away a lot of the stress and worry from moving home. We’ll discuss your situation, explore the options and help with your mortgage application. We’ll be there for the whole process, from starting your house search to moving day and beyond.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE