Moving house with a mortgage

19th May 2021 by Metro Removals

Many Metro Removals’ customers seeking removals in Market Harborough and Kettering wonder if they can move their mortgage from one property to another. If you’re ready to relocate but you already have a mortgage on the property you’re in, you may be wondering where you stand. Although moving house when you have a mortgage may seem like a minefield, things may become much clearer once you know the facts. Let’s take a look at what you need to do if you’re moving house with a mortgage.

What do I need to know about mortgages when moving house?

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There are several things you need to think about before you sell up and move on. Some people have portable mortgages, so check the small print to find out whether you are one of these. Some mortgages have early redemption penalties which mean you’ll be met with more costs. You may also need to borrow more to cover the cost of your next home. It may be possible to find a better mortgage rate than the one you’ve been paying for your current home. You also need to check whether you’ll incur any penalties for moving house with a mortgage.

Can’t I just transfer my existing mortgage to my next property

Unfortunately, you won’t be able to simply move your current mortgage to your next property. Your existing mortgage is normally secured on your current property, so the mortgage will be paid off in full when you sell your home. If you’re moving to a new home, this will need a new mortgage secured against it.

Mortgage rates

Most people have deals on their mortgage rates. This can make moving house with a mortgage somewhat complex. You may have a discounted variable rate, a fixed rate or a tracker rate. You could have a standard variable rate. If you don’t, you may be contracted to the rate you are on until it expires, and will be met with early redemption penalties if you pay off a substantial sum during the term. This penalty could be as much as 5% of what you’ve paid off.

What else do I need to know about early redemption penalties?

There are other things about early redemption penalties that you do need to be aware of. In most cases, you can overpay your mortgage by a modest amount without facing penalties. Most people aren’t penalised for paying less than 10% of their remaining mortgage payments each year. Penalties will be incurred if you move whilst you’re still eligible to be penalised, but portable mortgages can be applied to your new property. Your solicitor will still pay off your mortgage if you have a portable one, but redemption penalties will be rebated. You’ll be able to stick with the same rate you were paying in your old home.

When can mortgages be ported?

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It’s common for mortgages to be ported at the same time as existing mortgages are redeemed. Nonetheless, some lenders will give you six months from the time you sell your old property to moving to the new one. You may be charged redemption penalties when you sell your home, but these will be refunded around the time that you purchase your next one. You may be able to borrow at the same rate if you move to a costlier property and require a bigger mortgage. They may lend you the additional funds at a different rate. You will also incur penalties if you change mortgage lenders at some point in the future.

Can I change lenders to get a better deal?

You may well be able to change lenders to get a more preferable rate. People change their mortgage lender quite frequently. You may wish to change your lender when a good rate ends and you find a better offer with another lender. It’s also common for people to change lenders as they no longer fit their existing lender’s criteria. Some people change lenders because their current lender won’t let them borrow as much as they require. Your lender may also reject a mortgage application if they feel they are taking on more risk.

What will happen if I apply for a new mortgage?

If you apply for a new mortgage, your lender will carry out a valuation of your property alongside a series of new affordability checks. If you’re porting a mortgage, you’ll get the same terms, conditions and rates as you had before. Many people port their mortgages to avoid early repayment fees.

Is porting a lengthy process?

The porting process could be simpler than you expect. The process may be shorter if you need a bigger mortgage but have funds available to cover the difference. The lower the risk to your lender, the better your chances of approval are.

How can I fulfil the lending criteria?

Lenders assess a range of factors when deciding whether to approve your mortgage. They’ll look at your credit history, age, current income and the kind of property you want to buy. If they feel you have become a bigger risk over the years, they could reject your application. Many people enlist the services of mortgage advisors in order to find the most suitable deals for their requirements and current circumstances.

Contact us 

If you’re about to relocate and have been looking for removals companies in Market Harborough or Kettering, we are eager to hear from you. Metro Removals has been a leading player in the removals industry since way back in 1982. We offer some of the most competitive prices in the industry, with no compromises on quality. Why not get in touch today to arrange your free survey and get a free quote? You can contact us by calling us on 01536 665 149 (Kettering) or 01858 515 015 (Market Harborough). Alternatively, you can complete the form on our site or send a message to sales@metroremovals.co.uk.