Home movers

There are many different situations that home movers will need to take into consideration. One of the most significant is whether they have a mortgage already and whether they are able to port this mortgage to a new property, potentially borrowing more to cover a property which is more expensive or whether to switch to a new lender and a better deal which will save money. Depending on the terms and conditions of the mortgage, there may be an Early Repayment Charge (ERC) to pay, which is usually calculated as a percentage of the mortgage. This charge is required if the homeowners have a fixed term mortgage product and they wish to leave early. The ERC should always be carefully considered before switching, but in some cases, the cost savings that can be made by switching lender can far outweigh the cost of any redemption charge.

Porting

Most mortgages that you take out now are portable which means that you can transfer your current mortgage to a new property. While you will still have to complete the full mortgage application process, you may be able to increase the size of your mortgage to cover the cost of the new property if it is more expensive than the home you live in now. If you do need to borrow more, lenders may ask you to take out another mortgage which will cover the difference in the price. If this is an option that you want to consider, you should also factor in the costs of paying a new mortgage arrangement fee. New mortgage deals may also have a higher rate too so always check these details before you commit to anything.

Re-mortgage with your current lender

Homeowners also have an option to apply for a completely new mortgage which will replace your existing one if you would like to remain with your current provider. This may be a good strategy to find a better rate, but you will incur additional costs such as arrangement and product fees. There is also the early repayment charge to consider which can be anything from 1% to 5% of the total value of your mortgage. The amount that you pay will depend on the length of time you have left to run on your current deal. The closer you are to the end of your term, the lower the early repayment charge will be. The only way that you can avoid the early repayment charge is if you are on the standard variable rate for your lender.

Lenders may also charge an exit fee in addition to an arrangement fee and valuation for your new mortgage. Mortgage Advisors are best placed to source the best deals. Some lenders may allow you to take out additional borrowing to top up your existing borrowing so you can move to a new home.

Re-mortgage with a new lender

There is always the option to switch to a completely new lender if this is something that you would prefer to do. This could be used to pay off your existing mortgage, or you can sell your home, whichever is best for you. This could be a beneficial option if house prices have risen since you purchased your home. That said, there will often be early repayment charges to pay and exit fees for leaving your existing mortgage mid-term. In addition to this, you will also need to pay for valuation fees and mortgage arrangement fees on any new mortgage that you take out.

Your home may be repossessed if you do not keep up repayments on your mortgage.