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What does Home Mover mean?
The term ‘Home Mover’ refers to anyone planning to move to a new home. The two main options available to home movers are porting or moving your mortgage to a new provider.
What is Porting?
The process which enables you to transfer your mortgage to a new property when you move home is called porting. Most lenders will offer this option, which allows you to remain on the same mortgage deal, even though you’re changing properties.
Although porting your existing mortgage is a transfer, it still requires a new mortgage application, so you will incur arrangement fees, valuation fees, stamp duty as well as being reassessed to meet the affordability criteria. Your application to port your mortgage can be refused, especially if your financial circumstances have deteriorated since your original mortgage application.
In order to leave a mortgage before the term ends, you are ordinarily liable for early repayment charges. When you port your mortgage, however, this will vary between lenders, with some offering to waiver early exit fees.
Can I increase my loan amount when I port?
Some lenders will consider your request to increase the loan amount in order to purchase a more expensive property when porting your mortgage. Each lender’s criteria will vary, however, and your personal details and circumstances will determine whether they accept the request. You will need to prove that you can afford the higher repayments on your mortgage.
Some lenders will insist that you take out an additional mortgage in order to extend your loan. This means you could have two different mortgage rates and two sets of different terms, with the same lender.
Can I decrease my loan when I port?
If you’re moving to downsize you can usually port your mortgage to your new home, so long as the amount you decrease your loan by is no more than 10%. If your new property does require more than a 10% decrease, you may still be able to port but are likely to be liable to pay an early repayment charge.
How do I know if porting is right for me?
First, you will need to establish whether porting is an option for you, as some mortgage terms will not allow for it. Where this is the case, your only choice when moving would be a product transfer with your current lender or remortgaging with a new one. Speak to your lender to find out if porting is possible.
Your current circumstances will also impact whether porting is the best option for you. Our Mortgage Broker can explain which Home Mover Mortgage option will be most beneficial to you, based on your personal circumstances.
If you are unable to port or a new mortgage is the better option then Heritage will be able to assist. Our adviser will search the market for the most cost effective option based on your personal circumstances. When moving to a new provider there may be some additional costs, such as valuation and arrangement fees.
The first step will be to obtain a decision in principle, this will determine whether you pass the lenders affordability and credit scoring. Having this will enable you to put an offer on the new property and once accepted we will progress to the full mortgage application. Once the application is completed our advisers will work with you every step of the way to obtain the mortgage offer and then liaise with all the 3rd parties (solicitors, estate agents, developers etc) to ensure a nice smooth process through to completion.
Does the value of your current or new home affect your options?
Your current home
Those who have considerable equity in their current home will have a lower Loan to Value ratio, which means that you have more competitive mortgage options available to you and will generally have an easier time moving to a new home.
If you have low or Negative Equity (you owe more than your home is worth) then your options will be more limited. In these circumstances it’s unlikely lenders will accept applications for a new mortgage or to port your mortgage, unless you are downsizing. The interest rates available to you will also be less competitive, the lower your equity.
Your new home
Upsizing to a higher value home will always be more challenging than downsizing. For both porting and home move applications you’ll need to satisfy affordability and credit scoring criteria for the higher loan amount. This is unlikely to be possible unless you have significant equity or your income has increased since your first application.
Downsizing to a smaller home is more likely to be an option if you have low equity or your income has decreased or remained the same. Remember that if your new home’s value is more than 10% lower than your existing home, however, you will have to pay the difference between the two to your lender.
How a Heritage Mortgage Broker can help find you the most appropriate deal
Whether Porting or making a homemover application is the most suited type of mortgage for you, at Heritage, our brokers will examine your existing terms and your finances, to ensure you make the choice that benefits you most.
We have access to a wide selection of mortgage products from lenders across the high street and independent mortgage market, so can ensure you keep or find the most suitable deal. Whatever your Home Mover Mortgage type, we can reduce the administrative aspect of your application and support you throughout.