What does ‘Moving home mortgage’ mean?
Moving home mortgage or mortgage for moving home is availed for bad credit and self-employed people when you want to buy a new home and the mortgage of your current home moves to the new one. The loan on the existing house is paid off in the presence of your legal representative, and a new mortgage starts on the new home. The property papers of the new house transfers from the seller to the lender as the security. The borrower now starts paying the instalments of the latest purchased property.
Moving house and need a new loan?
Moving house may demand a new loan because of the difference between the new property and the previous one. According to the requirements in concern of the property purchased later, the need for a new loan arises typically.
Following conditions create the need of a new loan.
- The new home is higher in price, and thus more money is required to borrow.
- You want to get a better rate of interest to get smaller monthly instalments
- You may want to change the type of mortgage method such as the switch from interest-only to the repayment method
What are your options?
Mortgage for moving home comes with its several options. Borrowers exploit the one that fits perfectly according to the new one. Porting, remortgage from the current lender, and remortgage with a new lender are the three primary options that borrowers explore for their purposes.
Porting a mortgage means the home loan on the old property transfers to the new property, and it includes the following situations.
- The mortgage is paid off to pay the price of the old property. Your legal representative makes an application to the same lender for the new loan but with identical terms and conditions as the previous one.
- The lender will usually apply the same rates on the mortgage for the new house
- The finance company may give some rebate in the redemption penalty
Your lender may demand the porting to occur on the same day of redemption of the old mortgage.
Remortgage with your current lender
The other way is to deal with the mortgage while moving home is to take a complete new home loan deal with your current lender. The below situations cross your way -
- With the new mortgage deal from the same lender, you can get better rates
- You will have to pay (usually) the early repayment fee for closing the old mortgage that can go up to 5% according to the tenure left in the old deal.
- If your previous loan was on a standard variable rate, you might not need to pay the early repayment fee
- The exit fee is also there
- On the new loan, the arrangement fee and valuation fee will apply
Remortgage with a new lender
It is an entirely different situation in which you not only leave the old mortgage deal but also leave the lender. You switch to a new finance company and take a completely new deal. All the connections with the first lender end here and the circumstances included are -
- You first need to pay off the mortgage to the first lender in any of the two ways –
- The money borrowed from the new lender goes to the old one to pay off the complete loan
- You can sell your current house and can pay to the preceding lender
- Early repayment charge and exit fee will apply uncompromisingly
- Again the arrangement fee and valuation fee is sure to come into the picture on the new property loan
What can Shine Mortgages do for you as a mortgage broker?
Shine Mortgages owns expertise on the mortgage for moving home. Every month we deal with hundreds of cases and lead them to a successful end. Through a decided strategy, we help you fulfil your purpose.
- Our role usually appears when you want to switch to a new lender to get a new mortgage
- You can easily reach to us online through a simple application procedure
- We provide you affordable options online only and contact you to know your choice of deal from those we offered to you
- Once you choose the deal, we organise face-to-face meetings whenever you need
- We give you understanding of the selected deal
- Experts in our team contact from the lender on your behalf
- We start working on the documentation part according to the demand of the lender. We ask you only to provide us the required detail
- In case you are not paying it by selling your current home, we arrange a smooth paying off for your prior loan.
- We keep an eye once the loan term with the new mortgage company starts
- If there is any confusion between you and the lender, we become the bridge of clarity
We are there with you during the complete tenure of your mortgage. Until you pay it off, we remain right there by your side.
Why Choose Us
Shine Mortgages is always at its best in making efforts for the customers. We facilitate every feature in our services that is necessary to ensure the best experience to you.
COMPETITIVE MORTGAGE RATES
All our mortgage lenders have reasonably priced deals.
NO BROKER FEE
No fee is there our share comes from the lenders only.
Within a few minutes of the query, we respond with loan options.
We bring solutions according to you financial situation.
We specialise in every product, whatever is the mortgage type.
MULTIPLE LOAN OPTIONS
Get access to multiple mortgage options.
How much can I borrow when moving house?
You get in the situation to borrow more when your new house is higher in price than the current home. The decision of the final amount that you can borrow depends on your present affordability status, which further demands attention on many factors. You should know about them one by one.
- Generally, your limit to borrow depends on the LTV percentage a lender offers.
- Maximum limit is 95%, which means you need to pay a deposit of only 5% (as happens typically) of the complete property value.
Example – To clarify the situation if you get the Loan-to-Value less than 95%
- You current property value is £300,000 and last time you got 95% as loan of the total property value.
- Your new house is £3,50,000
- You need additional funds of £50,000
- As always, a loan amount will be approved in comparison to your creditworthiness expressed through the latest debt-to-income ratio
|LTV offered on property value in response to debt and income ratio.|
|Debt-to-income ratio||LTV %|
|50:50||Up to 80%|
|60:40||Up to 85%|
|70:30||Up to 90%|
|80:20||Up to 95%|
Any gap left to cover from additional £50,000 after the offered LTV needs to be arranged through your financial sources.
The Factors that affect the amount of money you can borrow
- Lender scrutinizes your payment regularity in the previous mortgage with the first lender
- Deposit size matters a lot
- Your current income and its compatibility with the debts and other expenses
ALL THE ABOVE FACTORS WORK TOGETHER TO GIVE A FINAL LOAN AMOUNT FIGURE THAT YOU CAN BORROW
How do You Qualify?
Qualifying for the mortgage with the different lender is about going through the same procedure that you went through while availing the first mortgage. Affordability check, income proof, employment stability, payment history, credit mix, everything comes under scrutiny.
These factors help you qualify
- You apply to the different lender in the guidance of your legal representative, which explains the complete situation to the lender. It makes things look more professional, reliable and qualifying for the funds becomes easy.
- Your broker will bargain for the affordable rates to match it with your repayment capacity.
- The coordination between your deposit size and LTV offered by the lender
How Can You Minimize Mortgage Fees?
There are three separate situations when you have to pay a fee. Have a look with the tactics to avoid the significant size fee expenses.
When you have to pay fee
- When you take additional money for the purchase of new house
- When you remortgage with the current lender
- When you remortgage with the new lender
Ways to minimize the fee
- Compare the fee applied by the lenders. Pick the one with the most rational fee structure.
- Negotiation is the best way to resolve issues. Negotiate with the lender for a lower charge.
- Try to convince the seller to lower the property price a bit as that lessens the loan amount and in turn the fee.
YOU SHOULD ALSO KNOW ABOUT THE SITUATIONS WHEN YOU DO NOT NEED TO PAY THE FEE
- If you are not borrowing additional funds, there will be no fee chaos.
- If you let the current deal end, you do not need to pay any fee.
A Quick Guide on How to Start Taking out a Mortgage
You need to take a mortgage when you want to remortgage with the new lender. With the existing lender, you already know the procedure and the mortgage provider takes care of all the method. The change in the picture happens when the new lender comes in the scene.
- Hire a broker to make it search for a lucrative mortgage deal by the time you indulge in the paying off procedure.
- When you get the options from the broker, immediately choose the one and ask the broking company to start the initial application process. Provide all the documents about the last deal form the first lender and also the property details.
- Complete the formalities of paying off the loan to the previous lender under the direction of your legal representative.
- Now you need to interact with the new mortgage lender in assistance of the broker.
- Do not forget to ask about the fee thing.
- Submit your deposit amount and try to keep it more prominent than the minimum of 5%. It will help cover the gap between the LTV and the actual property price.
- Keep you payments of bills and debts on time to show a disciplined financial behaviour
- The mortgage lender now will process your application
- Once the approval happens, the fund disbursal happens, and you can now carry on with a novel deal and the repayment thing.
How long does it take to get a mortgage?
The time limit depends on what procedure of mortgage you go through, Porting?/remortgage with the existing lender?/ remortgage with the new lender? Every type has a set procedure, and you need to follow that. Broking service can undoubtedly lessen the time that takes to complete the process. If everything, including the documents and home inspection thing, is at the right place, in maximum 15 days you can consider the work done.
What happens to your mortgage when you move?
While moving home, not only you but also your mortgage deal confronts some situations that are sure to come. It makes you consider the varied aspects of the mortgage and decide according to your priorities.
- You need to decide whether you want to port the deal to the new home or want to remortgage with the existing or new lender.
- In case you want to remortgage you need to check about the redemption fee
- Decide if you need to borrow additional funds or not
- The LTV in the case of the new property loan is also an essential factor to consider
- Your legal representative should be present until the final transfer of ownership happens
Pros and Cons of Moving Home Mortgage
You should always see the good and bad side of mortgage for moving home, as only that facilitates a better and rational decision
- You can get better rate of interest and thus the instalments are smaller in size
- You can use your home equity to borrow more funds
- You can pay a bigger deposit for the different mortgage deal if the price of your current home has increased and you are selling it
- You need to pay early repayment fee, exit fee for the old deal. Also, the arrangement fee for the new one increases your expenses.
- You may not get a desired LTV if remortgaging with a new lender
- The procedure may take a long time without any due assistance
Shine Mortgages never lets you get entangled in the complicated procedures of mortgage for moving home. We manage everything from start to end until the final step in the deal takes place, and you get the ownership of the new property. After all, responsible broking service is all about staying with the customer from start to end.
Mortgage for Moving Home FAQs
Can you move house if you have a mortgage?
Yes, you can move to the new house if you already have a mortgage. It can be possible for you by either using a remortgage option or by opting for a mortgage for moving home. These two options bring you the benefit of less interest rate than your previous mortgage and also contribute to monthly savings. For any confusion, you can consult with a mortgage broker who can guide you on the right option with better deals.
Is 2020 a good year to sell a house?
Always if you are planning to sell your house in this New Year, you can go with your plan. But keep one thing in mind is to wait for the impact of upcoming Brexit. Will, it has any effect on The Bank of England and its interest rates? If yes, then you should analyse the property rates first. It would be best for you to sell your house either right now or wait till once the Brexit will implement.
Is porting a mortgage easy?
Due to vast online research and the growing help of the mortgage brokers in the UK, the process of mortgage porting has become easier than before. Nevertheless, there are a few things that need to be considered, such as:
- Check the pre-payment charges of the existing lender
- Analyse what interest rates that new lender is providing
- Calculate how much savings you can do in a month
- Ask for a broker to do the job for you