Home Mover Mortgages

Home Mover Mortgages
​We are always happy to hear from new clients, so please get in contact today to discuss your mortgage options.
1 Step 1
Please tick how you would like us to contact you. *

Home Mover Mortgages

Home Mover Mortgages
Home Mover Mortgages

Mark Schouten joins us to talk all about mortgages for Home Movers.

Whether you’re buying for the first time, moving, investing or remortgaging we’ve got it all covered.

Listen to the latest podcast below to find out more!

What do we mean by Home Mover mortgages?

It’s simply a mortgage for someone who’s moving home. In the typical scenario, someone is looking to put their house on the market and buy another property. In the mortgage world it also includes people who have previously owned a home, even if they no longer have it.

What moving costs need to be considered?

Anything to do with houses and property in this country will involve costs and it does get more expensive as a home mover rather than a First Time Buyer. That’s because you now have to consider the cost of selling your house. There are solicitor fees for the sale of your house plus estate agent fees.

These days sometimes people find lower fees with online estate agents, but my recommendation is to go for a local estate agent. The fee is usually around 1% to 1.5% to sell your house.

You’re also going to have stamp duty as a home mover and there will also be mortgage costs. Lenders are very competitive at the moment so they don’t charge many upfront fees, but it’s still part of the cost when you are moving house. Plus of course you need to allow for removal services as well to move all your belongings from one property to the other.

How much can I borrow as a Home Mover?

This depends on your situation, but the starting point is always your income. That’s part of our job at Mortgages Plain and Simple, to confirm the income that we can use to explore different lenders and what they can offer you.

Next we look at your expenses – the credit commitments you’ve got, for example, as part of the fact-finding process. We tend to say to people that if they have a five or 10 per cent deposit, you might expect to be able to borrow around 4.5 times your income.

Lenders are starting to get back to where they were before the pandemic, so in some situations with a good deposit and with a good salary you can get up to about five times your income – and potentially a little bit more in some circumstances.

What is porting?

Porting is where you’re moving your existing mortgage to another property. That’s really beneficial where you have an early penalty charge. Over the last eight to ten years people have preferred to take fixed rate mortgages. If you’re in a five year fixed deal and decide after two years that you want to move, you need to be cautious of those penalty charges for leaving your existing lender before the deal ends.

Porting allows you to move without a penalty. Let’s say you had a mortgage of £200,000 and you were looking to borrow £300,000 for your next property. You can essentially move that £200,000 loan across without penalty charges, and then go to your existing lender for an additional £100,000.

The thing to be careful with is that if you’re extending your borrowing you will have to reapply with your lender. They need to be happy with the property you’re buying and the affordability of the new mortgage. But in the majority of the cases it saves people money without having to leave their existing lender.

Speak To An Expert

​We are always happy to hear from new clients, so please get in contact today to discuss your mortgage options.

Can I increase the mortgage value when I port?

In the scenario mentioned earlier, if your lender is happy to lend you £300,000 in total and your current mortgage is £200,000, then your current mortgage gets moved across and we apply for a new product to increase your borrowing.

The current mortgage of £200,000 doesn’t stop you from borrowing more with your existing lender as long as you qualify for the new deal. So there’s no issue with increasing the mortgage value as long as you fit the affordability criteria.

Can I port my mortgage if the new home is cheaper?

Yes, you can port your mortgage to a less expensive home. You will still need a deposit for the new property. If your current mortgage was £200,000 and you were going to buy another house at £200,000 you’d have to reduce that loan amount slightly to allow there to be a deposit on the property.

In the majority of situations where people are downsizing to a lower value house, they usually have got a decent amount of equity in their current property anyway. So moving it across to a new property is usually easier than porting for a more expensive property.

How do I decide whether to port or get a new mortgage?

It depends on the individual circumstances. There are two situations where porting would not work. The first is where you want to buy a property and your current lender won’t give you a mortgage on that new property. But that doesn’t mean another lender will offer you the mortgage on the property you want to buy. Then you need to decide whether to pay that penalty charge with your existing lender.

In the other scenario, a client is moving house and they do have a penalty charge on their current mortgage and they have the option to port it. But when we compare the costs of porting the mortgage vs going to a completely new lender, it will actually cost less to pay the penalty charge and choose the new lender because the interest rate on the new product is much lower than their existing rate.

Over the next five years in this situation they will recoup more money, even by paying the penalty charge.

How does the equity in my home affect my options?

Your equity can be really useful in a number of scenarios, especially when you’re moving house, as you use your equity as your deposit.

If you’ve sold your property, anything left once your current mortgage is paid off can be put towards your new home. A lot of the time you never actually see the money. It goes into the solicitor’s bank account and then straight to the next property.

Sometimes people are in a situation where they’re lucky enough to have lots of equity in their house, which means they might not actually need to sell. They can actually raise money from their current property to put down as a deposit for their new house, and rent their existing one out. So you don’t always need to sell to release the equity.

How is moving home affected by upsizing, downsizing and negative equity?

If you’re upsizing or downsizing, the number one thing to think about is the overall cost of moving. We also do financial planning here and if you’re moving frequently you’re going to be eating away at that equity in the property. The longer you can stay somewhere, the better.

If you’re looking at buying a house, plan to be there for a long period of time. A house is probably one of the best investments that we can make in our lifetime. The longer you keep that investment, the more that equity is going to build and you’re not going to keep incurring fees every time you move.

Sometimes I suggest to people that they be patient – if you can’t buy the perfect home now, don’t compromise. Just wait a little bit longer. House prices in the last couple of years have been booming lately, but that’s not always the case. If the market goes down then you can find a better deal on a home. Moving to a short term home is going to reduce how much you can put down on the next property.

What advice do you have for a Home Mover?

The main thing with moving house is that you need a little bit of patience. There’s a lot involved, especially because you’ve now got property chains. Don’t panic – your broker is there to help you and guide you through it.