What does Home Mover mean?
A home mover is someone who already has a mortgage and is looking to move to a new home. If you meet this criteria, there are a variety of options available to you. You may not have to change lenders or even your mortgage.
When you move to a new home, it may be possible to remain on your current mortgage terms. Most lenders are able to transfer your mortgage to the new property. This is known as porting your mortgage.
Although most mortgages are portable, you’ll still need to complete a new mortgage application. There will also be new fees, such as valuation and stamp duty for your new home. Bear in mind that, if your financial situation has declined since you first applied, you can be refused.
If you need to increase the size of your mortgage, the lender may require you to take an additional mortgage out on top of the ported one. This can be more expensive than remortgaging, so it’s worth weighing up your options before making a decision.
If your mortgage is not portable, your only option is to remortgage. Whether you decide to do this with your current lender or choose a new one, you should be aware that there may be early repayment charges required to leave your existing contract.
Remortgaging can save you thousands of pounds in some circumstances, however, this is unlikely to be the case if you are a home mover. One exception would be if you are downsizing and/or your new home costs less than your current home. You should be aware that the fees involved with remortgaging could still negate this.
If you do choose to remortgage, there are optimum times to do this. For example, when you are nearing the end of your current fixed-rate deal, if the value of your current property has risen dramatically or if you are close to paying off your mortgage.
Remortgaging with an existing lender
If you cannot or decide against porting your mortgage, you can consider remortgaging with your current provider. Unfortunately, remaining with the same lender will not necessarily avoid early repayment fees. The only circumstances where you may be able to avoid this are if you are on a SVR (standard variable rate) mortgage.
Remortgaging with the same lender could also be subject to exit fees, a new valuation fee and a new arrangement fee. Therefore, unless your current provider can offer one of the best interest rates on the market, it is definitely worth looking around for a better deal.
Remortgaging with a new lender
If the deals available with your current lender are not very appealing, you could consider remortgaging with a new lender. It is always worth comparing options before making a decision.
You can use a remortgage to pay off the remaining debt on your existing mortgage, as well as borrowing for your new home. If you sell your original home, this may raise enough to pay off your original mortgage, although you should be aware that you may be liable for early repayment fees.
How does the value of your current home affect your options?
This can be challenging, but will be easiest for home movers whose property has gone up in value. In either case, you will need to prove that you can afford the higher loan amount.
This has the potential to save you the most money. If your new home is cheaper, the repayments will decrease. It may even be possible to purchase a cheaper home outright if you can make a large enough profit from the sale of your current home.
It’s unlikely that you will be able to secure a new mortgage if your home is in negative equity (the value has fallen since purchase). There are a few extenuating circumstances, such as relocation for work.
How a mortgage broker can help find you the best deal
If you decide to remortgage,there are a range of tools available on the internet, such as mortgage calculators, which can help find different mortgage deals.
In order to find the best deals, however, it’s best to speak to a mortgage broker who specialises in remortgaging, as they will have a whole market view. This means that they may have access to deals that are not available on the open market. They can also advise you throughout the process.