A Moving House Mortgage
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Looking for a moving house mortgage can be a daunting task, that’s why here at Your Certified Expert our friendly team are happy to answer any questions you may have.
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A moving house mortgage explained:
A moving house mortgage refers to the process of dealing with your mortgage when you sell your current home and buy a new one. When you move to a new house, you have two main options regarding your existing mortgage:
- Porting Your Mortgage: This means transferring your current mortgage to the new property. If your mortgage is “portable,” you can move it to your new home, keeping the same terms and interest rate. This is often done to avoid early repayment charges (ERCs) associated with paying off your mortgage early. If your new home costs more than your current one, you might need to borrow additional money, which could be added to your existing mortgage or taken out as a separate loan.
- Taking Out a New Mortgage: Instead of porting, you can pay off your existing mortgage (which may involve paying ERCs) and apply for a new mortgage on your new home. This option might be preferable if better mortgage deals are available or if your financial situation has changed and you qualify for a lower interest rate.
Key Points to Consider:
- Portability: Not all mortgages are portable. Check with your lender if you’re considering porting your mortgage.
- Costs: Moving house often involves costs such as legal fees, valuation fees, and possibly stamp duty, in addition to the costs related to your mortgage.
- Affordability: Whether porting or taking a new mortgage, lenders will reassess your financial situation to ensure you can afford the new mortgage payments.
- Porting: You have a fixed-rate mortgage with a low interest rate and two years left on the fixed term. You decide to move to a new house and port your mortgage to keep the favorable rate.
- New Mortgage: Interest rates have dropped since you took out your current mortgage, and you’re moving to a more expensive home. You decide to pay off your existing mortgage and take out a new one with a better rate for the new property.
In summary, a moving house mortgage is about managing your mortgage during the process of selling your current home and buying a new one, whether by porting your existing mortgage or securing a new one.
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