If you have an existing mortgage and are looking to move to a new property you have a couple of options. You can remortgage to a new lender or you can move your mortgage from your current property to the property you wish to buy. This is called porting.
Most lenders allow mortgages to be transferred to a new property these days but there are a couple of things to bear in mind. Firstly, your lender will need to check your eligibly and affordability and also the property’s suitability, just as if you were applying for a new mortgage. This may mean that you will need to have a valuation carried out on the new property at your cost. Secondly, you may have to pay a fee to transfer the mortgage. This could be a couple hundred pounds depending on the lender. It is also worth pointing out that you may need to pay additional fees if you need to borrow more as part of your move and any additional borrowing could be at a different rate of interest and terms depending on product availability at the time.
Porting is a relatively fuss free way of moving house however it could mean you miss out on the chance to get a better mortgage deal. It is worth looking around at the remortgage options available to you before deciding whether or not you’d like to transfer your current product. However, this could be the cheaper option if an Early Repayment Charge is applicable.
If you’re out of your original mortgage deal (for example if you had a two-year fixed rate and those two years have now expired, leaving you on your lender’s Standard Variable Rate) you won’t have to pay any early repayment charges. However you could still face an exit fee of a few hundred pounds. Whether or not it’s worth doing this depends on how good a deal you could get by switching.
It’s worth bearing in mind however that in the last few years we’ve seen lenders tighten their criteria, particularly as a result of new regulation following the Mortgage Market Review and legislation from the EU. This means you may face tougher eligibility requirements when applying for a mortgage with a new lender. What’s more, you may have to pay an arrangement fee to the new lender.
If you’re thinking of moving home and you’re unsure of the most appropriate option for you and your mortgage call in and see us today at We Know Mortgages Ltd. Our expert team can ensure you find the most cost efficient and most appropriate option.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.