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Moving Home Mortgage Advice
Buying a house is a huge commitment, which can seem even more daunting when you feel as though you may look to move again, especially when having the financial obligation of a mortgage to consider. The good news is just because your mortgage will be arranged over a term of say, 25 years, this does not mean you are tied into the mortgage for that length of time.
Moving home can give the opportunity to be flexible with your mortgage on both scales which may help in achieving your desired borrowing and monthly payment amount.
What happens to my existing mortgage when I move house?
Most mortgage products carry a feature which means they are ‘portable’ i.e. you can carry the mortgage over to a new property should you decide to move. It’s important to check that your mortgage product is portable if you are thinking of moving as it may provide the best option. If you decide to move home whilst in a mortgage product with an early repayment charge and your product is portable, your broker will simply need to submit a porting application with your existing lender. In most instances, a ‘top up’ will be needed to account for any increase in purchase price, where an additional part to the loan will be required.
Alternatively, if you anticipate you may look to move within a few years of purchasing a property, it’s wise to only fix your mortgage product to match this length of time or opt for a product with no early repayment charges. It’s important to discuss your plans for the future with your broker so they can recommend the most suitable product for you.
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Do I need a deposit to move house?
As with your first house purchase a deposit will also be needed when you look to purchase a new home. If you have been in your current property for some time then the chances are your property will have increased in value, and your mortgage balance will have decreased from your monthly repayments. The difference in the new value and the current mortgage balance is called your equity and can be used as your onward for your new home. Should you decide to keep some of this aside for a holiday, new car or debt consolidation then that’s entirely up to you and you will simply need to ensure you have enough deposit for the product applied for.
What costs are involved with moving home?
When moving home there are a variety of expenses that need to be considered. You may be looking to opt for a removal company for your furnishings, or perhaps a period of storage time is required where a simultaneous completion cannot occur?
With regards to your direct purchase costs, we often advise to budget for a new home survey, such as a Homebuyers or Structural Survey. Additionally, you will need to consider legal costs not just for selling, but also the purchase of your new home. Should you own, or be purchasing, a leasehold property then this may further increase the costs involved by dealing with a managing agent.
Finally, stamp duty will also be a consideration, and your opted solicitor can advise of this when you have a secured your purchase price.