Home Mover Mortgages
Home Mover Mortgages
- Expert Mortgage Advisers
- Fee-Free Initial Consultation
- Access to Competitive Rates From Dozens Of Lenders
Table of Contents
Speak to an expert
Mortgages For Home Mover
Steve Hendriks talks all about mortgages for Home Mover. Listen Below.
PLEASE NOTE: This podcast and transcripts were correct at the point of recording in 2021. Some of the facts/figures quoted may have since changed, however when you speak with a Mortgage Adviser, they’ll be able to provide you with the most up to date facts/figures.
What do we mean by a home mover mortgage?
A home mover mortgage is no different to any other mortgage – it’s the situation that’s different. Compared with a First Time Buyer, a home mover already owns a property. Unless you decide to keep your home, you will need to get it on the market and get it sold alongside buying a new property. The actual mortgage that would be used to purchase the onward property is the same.
What moving costs need to be considered?
Usually, the biggest cost involved is the deposit. The minimum deposit you need is 5%, so the most you can borrow is 95% of the property value. The deposit often isn’t a problem because it will come from the equity in selling your home. With house prices as high as they are at the moment, people are usually left with plenty of equity in their current property. You can either use all of that as a deposit for your onward purchase, or keep some back to pay off unsecured credit cards, loans or finance etc.
Next you have estate agents’ fees. These are only paid when you sell a property, not when you buy. Usually an estate agent will charge you around one to two percent of the property sale price. Fees do vary. A lot of online companies now set a fixed fee of £999, but your high street agent will normally charge between £2000 and £5000 to sell a typical property.
Then of course there’s stamp duty, which is a government charge. It can be a lot and will depend on your personal circumstances and the value of the property that you’re buying. It works in bandings – you are charged 1% up to a certain amount then 2% and so on. It’s different for everybody and is unavoidable, unfortunately.
For home movers you will also need a removal firm – you’ve already got a house full of furniture. You may want to arrange for a firm to collect everything on the day that you move and take it to the new property for you. Or you may decide to put the furniture into storage if, for example, the sale of your property needs to complete before you move into your new house. The costs will depend on how much there is to move or store.
When you enlist the help of a broker we will go through all these costs with you so they are transparent upfront. I’ve got calculators that quickly work out stamp duty, solicitors fees and all the costs so that you can budget carefully.
How much can I borrow as a home mover?
How much you can borrow depends on how much you earn and what your outgoings are. If it’s a joint application your incomes are added together. It is quite a complex calculation because it’s not just how much you earn and how much you spend. There’s also the Loan to Value of the property – which is how much you’re borrowing versus how much the property is worth.
Lenders will also look at your credit score – if this is low for whatever reason, the bank might cap how much they lend. It can be a bit of a minefield, which is why you need a broker to work it out for you.
What is porting?
Most mortgages available in the UK as of today are portable – which means you can literally keep your mortgage when you move house. You stay with the same lender and they just port the mortgage from one property to another.
Speak To An Expert
- Expert Mortgage Advisers
- Fee-free Initial Consultation
- Access to Competitive Rates
- Access to Dozens Of Lenders
Can I increase the mortgage value when I port?
Yes, as long as the lender agrees. Let’s say for example, you’re in a property with a mortgage of £150,000 outstanding. You then agree to buy a new property but you need to borrow an extra £50,000, so you’d need a mortgage of £200,000 on the new home.
You’d speak to your existing lender and they might want to see payslips and bank statements to show that you can afford the increase. If this all looks OK, they will move your current £150,000 mortgage to the new property and top it up to £200,000. Sometimes they can set up what’s called a sub-account, where you have two separate mortgage payments to the same lender. Otherwise they will just increase the main mortgage to the new value.
Can I port my mortgage if the new home is cheaper?
Yes – this works in the opposite way. Say your current mortgage balance is £150,000 and you’re downsizing to a cheaper property where you only need a £50,000 loan.
You will look at the equity in your current home and pay a chunk off your existing mortgage, reducing it to however much you need on the new property. Again, you stay with your current lender and you just have a smaller mortgage with them.
How do I decide whether to port or to get a new mortgage?
The decision will be down to the individual and what your lender is prepared to offer. In my experience it’s often cheaper to start again with a new lender. It’s a harsh way to look at things, but lenders want new business. You’ll probably get a better deal as a new customer than you will going back to your existing lender.
Start by speaking to your lender to find out what they can do, then speak to a broker to see if it’s going to be cheaper to arrange a brand new mortgage. We will be able to see what your current lender can offer you and tell you if it’s going to be worth it very quickly.
How does the equity in my home affect my options?
Equity is basically your available funds in the property. Let’s say for example that you purchased a house for £250,000 ten years ago. You put down £50,000 and took out a £200,000 mortgage. Now, ten years later, your property has appreciated in value and is now worth £500,000 – it’s increased by £250,000. That is the amount of equity available to you.
It means you’ll get a much better interest rate moving forward. If you’re downsizing, you might have enough to buy the property outright without having a mortgage at all.
Essentially, the more equity you’ve got, the better. It means you can put down a bigger deposit on the next purchase.
There is something called negative equity which very seldom happens now. Ten years ago some lenders offered 100% mortgages where you didn’t need a deposit. But if the housing market falls and your property loses value you can be in negative equity, where you owe more than your property is worth. But generally speaking that doesn’t happen nowadays – property prices are just always on the up.
What advice do you have for a home mover?
The main piece of advice is to use a broker – there are so many pitfalls out there and so many different options. A mortgage broker will be able to provide professional advice and can help find you the right deal for your circumstances.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Why us?
- Expert Mortgage Advisers
- Fee-free Initial Consultation
- Access to Competitive Rates From Dozens Of Lenders
Mortgages For Home Mover
Steve Hendriks talks all about mortgages for Home Mover. Listen Below.
What do we mean by a home mover mortgage?
A home mover mortgage is no different to any other mortgage – it’s the situation that’s different. Compared with a First Time Buyer, a home mover already owns a property. Unless you decide to keep your home, you will need to get it on the market and get it sold alongside buying a new property. The actual mortgage that would be used to purchase the onward property is the same.
What moving costs need to be considered?
Usually, the biggest cost involved is the deposit. The minimum deposit you need is 5%, so the most you can borrow is 95% of the property value. The deposit often isn’t a problem because it will come from the equity in selling your home. With house prices as high as they are at the moment, people are usually left with plenty of equity in their current property. You can either use all of that as a deposit for your onward purchase, or keep some back to pay off unsecured credit cards, loans or finance etc.
Next you have estate agents’ fees. These are only paid when you sell a property, not when you buy. Usually an estate agent will charge you around one to two percent of the property sale price. Fees do vary. A lot of online companies now set a fixed fee of £999, but your high street agent will normally charge between £2000 and £5000 to sell a typical property.
Then of course there’s stamp duty, which is a government charge. It can be a lot and will depend on your personal circumstances and the value of the property that you’re buying. It works in bandings – you are charged 1% up to a certain amount then 2% and so on. It’s different for everybody and is unavoidable, unfortunately.
For home movers you will also need a removal firm – you’ve already got a house full of furniture. You may want to arrange for a firm to collect everything on the day that you move and take it to the new property for you. Or you may decide to put the furniture into storage if, for example, the sale of your property needs to complete before you move into your new house. The costs will depend on how much there is to move or store.
When you enlist the help of a broker we will go through all these costs with you so they are transparent upfront. I’ve got calculators that quickly work out stamp duty, solicitors fees and all the costs so that you can budget carefully.
How much can I borrow as a home mover?
How much you can borrow depends on how much you earn and what your outgoings are. If it’s a joint application your incomes are added together. It is quite a complex calculation because it’s not just how much you earn and how much you spend. There’s also the Loan to Value of the property – which is how much you’re borrowing versus how much the property is worth.
Lenders will also look at your credit score – if this is low for whatever reason, the bank might cap how much they lend. It can be a bit of a minefield, which is why you need a broker to work it out for you.
What is porting?
Most mortgages available in the UK as of today are portable – which means you can literally keep your mortgage when you move house. You stay with the same lender and they just port the mortgage from one property to another.
Speak To An Expert
- Expert Mortgage Advisers
- Fee-free Initial Consultation
- Access to Competitive Rates
- Access to Dozens Of Lenders
Can I increase the mortgage value when I port?
Yes, as long as the lender agrees. Let’s say for example, you’re in a property with a mortgage of £150,000 outstanding. You then agree to buy a new property but you need to borrow an extra £50,000, so you’d need a mortgage of £200,000 on the new home.
You’d speak to your existing lender and they might want to see payslips and bank statements to show that you can afford the increase. If this all looks OK, they will move your current £150,000 mortgage to the new property and top it up to £200,000. Sometimes they can set up what’s called a sub-account, where you have two separate mortgage payments to the same lender. Otherwise they will just increase the main mortgage to the new value.
Can I port my mortgage if the new home is cheaper?
Yes – this works in the opposite way. Say your current mortgage balance is £150,000 and you’re downsizing to a cheaper property where you only need a £50,000 loan.
You will look at the equity in your current home and pay a chunk off your existing mortgage, reducing it to however much you need on the new property. Again, you stay with your current lender and you just have a smaller mortgage with them.
How do I decide whether to port or to get a new mortgage?
The decision will be down to the individual and what your lender is prepared to offer. In my experience it’s often cheaper to start again with a new lender. It’s a harsh way to look at things, but lenders want new business. You’ll probably get a better deal as a new customer than you will going back to your existing lender.
Start by speaking to your lender to find out what they can do, then speak to a broker to see if it’s going to be cheaper to arrange a brand new mortgage. We will be able to see what your current lender can offer you and tell you if it’s going to be worth it very quickly.
How does the equity in my home affect my options?
Equity is basically your available funds in the property. Let’s say for example that you purchased a house for £250,000 ten years ago. You put down £50,000 and took out a £200,000 mortgage. Now, ten years later, your property has appreciated in value and is now worth £500,000 – it’s increased by £250,000. That is the amount of equity available to you.
It means you’ll get a much better interest rate moving forward. If you’re downsizing, you might have enough to buy the property outright without having a mortgage at all.
Essentially, the more equity you’ve got, the better. It means you can put down a bigger deposit on the next purchase.
There is something called negative equity which very seldom happens now. Ten years ago some lenders offered 100% mortgages where you didn’t need a deposit. But if the housing market falls and your property loses value you can be in negative equity, where you owe more than your property is worth. But generally speaking that doesn’t happen nowadays – property prices are just always on the up.
What advice do you have for a home mover?
The main piece of advice is to use a broker – there are so many pitfalls out there and so many different options. A mortgage broker will be able to provide professional advice and can help find you the right deal for your circumstances.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Why us?
- Expert Mortgage Advisers
- Fee-free Initial Consultation
- Access to Competitive Rates From Dozens Of Lenders
