Home Mover Mortgages
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Home Mover Mortgages
What types of properties can be purchased as a home mover? What type of mortgage can I get as a home mover?
The types of property you can purchase as a home mover are the same as those for a First Time Buyer or a remortgage. You can purchase any type of property: a house, an apartment or a flat, a bungalow or a detached house. There’s no limit to what you can and can’t buy. Of course, there is a limit to what you might be able to afford, but not around the type of property.
As a home mover, you’re still eligible for the standard range of mortgages. There might be a slight difference from what you had as a First-Time Buyer, but only marginally. You’re still able to access the vast majority of mortgage lenders and mortgage products, as always.
What is a Mortgage in Principle and how do I get one as a home mover?
A Mortgage in Principle, a Decision in Principle, and an Agreement in Principle are all the same thing. It’s an affordability check, a credit check and an ID check. It’s the pre-approval before you actually apply for a mortgage.
It’s really important to get an agreement in principle before you consider moving. This means that when you’re looking to move home, you know exactly what your budget is and you’re pre-approved, so when you make an offer, you’re in a strong position. You’ve done all the preparation, and the person selling the property can take comfort from that—they know that you’re a good bet when it comes to actually buying their home.
To get one, it’s the same process you went through as a First Time Buyer, with a few differences. When you’re moving home, chances are you’ve already got a mortgage. So, how did you service that mortgage? Did you make all the payments on time and in full?
We conduct a full affordability check and obtain the documents to assess your borrowing capacity. Then, based on your answers to the questions we ask, we will obtain that Mortgage in Principle for you.
How long does the mortgage application process take for a home mover?
Again, it’s the same as for a First-Time Buyer. Of course, when you’re moving home, there are more moving parts—because someone’s buying your home, you’re buying a new property, and you’re in a chain.
Once you’ve had an offer accepted, it will take 7 to 21 days from submitting the application for the valuation to be carried out, the underwriting to have taken place, and the mortgage offer to be issued.
It can sometimes be a bit quicker—or slower, depending on your circumstances. However, it’s not going to slow anything down because the longest stage in moving home is the conveyancing process, not the mortgage.
What is the maximum amount that can be borrowed on a mortgage as a home mover? And the minimum deposit required?
The maximum amount on a mortgage when you’re moving home will be based on a few things: your income, current credit commitments or debts, the equity in your current home as the deposit for the next purchase, and, of course, your credit history.
The maximum amount will potentially be four and a half or five times your income, but that’s only a very rough guide because it’s all based on affordability. Things that will impact how much you can borrow include significant loan repayments and having children, as we know that reduces your disposable income.
So while the affordability requirements when you’re moving home don’t really change, what probably will have changed is that you may now have things on finance, children, or other credit commitments.
So don’t make any assumptions. Speak to a broker and nail down that affordability before considering moving home.
Again, the minimum deposit is the same as for a First-Time Buyer. The minimum equity you would need is 5%. Anything above that would be fantastic because it means you may be eligible for better interest rates and preferential terms.
What are the eligibility criteria for a mortgage as a home mover?
The main eligibility criteria for moving home and looking for a new mortgage is that you generally already own a home. Other than that, everything remains the same.
People ask whether they need to have lived in a property for a certain amount of time, but there’s no requirement. You could have been a First-Time Buyer and been there six months and want to move. That’s absolutely fine.
Because you’re moving home, you will need an income and a track record of paying a mortgage. You’ll also need a good credit history sufficient to meet the lender’s policy.
Can I get a mortgage as a home mover if I have bad credit?
Absolutely. Bad credit often worries people, especially if they’re moving home, but you can still get a mortgage as a home mover if you have bad credit. It’s not the barrier people think it is.
You may need a slightly higher deposit and pay a slightly higher interest rate. But people often worry about this, sometimes unnecessarily. The best thing to do is speak to a broker because it’s probably not as bad as you think.
Many lenders appreciate that life doesn’t always go to plan, but you can still get a mortgage as a home mover if you have bad credit.
What does porting a mortgage mean?
Porting a mortgage is essentially picking up a mortgage from your current home and moving it to the property that you want to buy. You port it across.
Many mortgages have redemption penalties, a cash cost to leave. Lenders offer porting to avoid paying those penalties. If you’re taking a step up the property ladder, you can take that mortgage with you, avoid the penalties, and then take a top-up to buy the new home.
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What is the duration of a home mover mortgage?
It can be anything from two years up to 40 years, depending on your age, your circumstances, and how much you need to borrow. There are no hard and fast rules here. It depends on what you want to do. Anything up to 40 years is possible when you’re moving home.
What fees are associated with a mortgage as a home mover then?
There may be a set-up fee for the new mortgage, redemption penalties if you can’t port your current mortgage, valuation fees, and broker fees.
You might have a porting fee, and of course, there are other fees to consider, such as estate agency fees for selling your current home and conveyancing fees for both selling your home and buying the new one.
Understanding the fees associated with moving home is really important—it all has to fit within your budget and be affordable.
The fees will depend on your circumstances, so speak to a broker to get a clear picture of what it’s going to cost, how much you can borrow, and whether the move you want to make is available to you.
What happens if I can’t keep up with repayments on my mortgage as a home mover?
If you’re struggling to keep up with repayments on your mortgage, always speak to your lender. Lenders understand that bad things can happen and life can take a very sudden turn.
If paying your mortgage is challenging, the worst thing you can do is bury your head in the sand. Always speak to your lender—they will try to help you and find a way through.
Don’t ignore the problem or hope it will go away on its own—it won’t. If you miss repayments on your mortgage, that can impact your credit file, of course. We want to try and minimise that as best we can, and the first port of call is always to speak to your existing lender.
Is it more difficult to get a mortgage as a home mover if I’m self-employed?
Self-employed people can often worry about getting a mortgage when they’re moving home, especially if they had been employed when buying their first property.
If you’re self-employed and want to move home, the main thing is how long you have been self-employed. We need to examine your income as a self-employed person and whether you are a sole trader, a limited company, or a partner in a business.
Ultimately, you have the same access to the range of mortgages as everyone else, as long as you can evidence your income to borrow enough for the home you want.
I understand that people worry about this, but it’s really not as big a concern as you may think. Don’t sit and worry; speak to someone who knows and can help you through that process.
How can a mortgage broker help here?
Moving home is a big decision because you’re thinking about all manner of things. What can you borrow? What can you afford? What type of property would you like to move to?
A mortgage broker can help in many ways, such as assessing how much you can borrow, talking through the costs and fees of moving, and explaining the process because there are many moving parts.
You must consider the estate agency you choose, stamp duty land tax, and any penalties on your current mortgage, depending on the price you buy at.
Explaining the process is key and a mortgage broker can help by ensuring that you understand what’s going to happen. Then you will be clear on what you’re getting into and how everything fits together.
When you’re considering moving home, seek out expert and unbiased advice. Make sure you’re aware of what you’re doing, what it’s going to cost, and whether you can get the type of home you want based on your circumstances.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.