Home Mover Mortgages
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Home Mover Mortgages
All about home mover mortgages with Anthony Mcquilliam.
What do we mean by home mover mortgages?
It’s about stating the difference of your situation compared with a First Time Buyer, who doesn’t have a house that they’re moving from. A home mover is just someone who is selling a property to then buy their next home.
What moving costs need to be considered?
You’ve got similar costs to a First Time Buyer, but there are a few extra bits that you need to allow for as you go through the process. Obviously you’ve got to put down a deposit for your new property. A lot of that tends to come from the sale of your current property, through the equity you have built, plus any additional savings.
You’ve also got estate agent fees. A bit of advice on this: There are a lot of estate agents out there, ranging from those that will charge you £1,000 upfront to take the property on the market, without doing any work, to estate agents with very cheap fees. If you’ve already paid upfront there’s no real incentive for them to actually sell the property. But at the other end of the scale, cheaper fees might mean there is little money to market your property.
It’s often worth looking for an estate agent with higher fees that can achieve better results because they can put more into the marketing. You could actually net more money in the end that way.
Then you’ve got solicitor fees – one for buying, one for selling and you also need to allow for removal costs. There may be storage requirements for some of your belongings.
Then, finally, don’t forget about valuation fees and stamp duty.
How much can I borrow as a home mover?
How much you can borrow is highly dependent on the kind of lenders you speak to. Going directly to a bank, you’ll only be offered a loan up to their specific maximum amount . But a broker can look at many more lenders – so if you’re looking at maximising your borrowing, we may find you a provider that can lend you a lot more.
For example, on a mortgage application I was looking at a few weeks ago, one of the applicants worked for the NHS. Certain lenders looked at their income completely differently to others. The difference in borrowing between the different lenders was £80,000. It sounds crazy, but one lender accepted all their shift allowances and income from extra shifts they worked.
Knowing which lenders to look at could really make all the difference in giving you the opportunity to move and giving you a property with that extra bedroom for your family.
It’s not just NHS mortgages. Everyone’s got their own quirks in how their income works and every lender assesses that differently. But very generally, you should be able to borrow on average between 4.5 and 5.5 times your salary, depending on the lender.
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What is porting?
If you’ve got a mortgage already and you’re in a fixed rate period, leaving that deal before the end will mean you face an early repayment charge. Instead, a lot of lenders will allow you to ‘port,’ where you carry your mortgage over to your new property.
That way, you don’t have to pay any early repayment charges. If the new home is cheaper, you can still port but it’s best to put down a lower deposit. If your new home will cost more, it’s just a case of getting a top up mortgage alongside your ported mortgage. You will have two mortgages running alongside each other.
Is porting a mortgage a good idea?
That will depend on your specific circumstances. Sometimes it’s worth it, sometimes not. For example, you have a mortgage with one particular lender and they will only lend you a certain amount to port your mortgage over. Meanwhile, a new lender is offering you an extra £30,000 to £40,000. You might decide it’s worth paying a £2,000 early repayment charge to buy the property you want.
But the early repayment charge could be £10,000 in your situation. Or you might not need to borrow that extra amount. It can be worth it, but it all depends on each person’s situation – and we’ll explain all the options as part of our conversation with you.
How does the equity in my home affect my options?
When you have more equity to be able to put down on a property, the bank sees you as lower risk. That means you tend to qualify for better rates compared with products for a higher Loan to Value.
So someone with a 5% deposit tends to be charged more than somebody that has a much bigger deposit. On top of that, having more equity in your house can mean that lenders are more relaxed on much you can borrow. They can potentially lend you more if you have a bigger deposit.
How can a mortgage broker help?
One of the biggest stressors for home movers is selling the current property. You have to coordinate that with the purchase of the new one – alongside the rest of the chain. You also have to line up your solicitors and the mortgage.
Going directly to your bank means you need to manage all this on your own. It can become a full-time job in itself. Not many of us have the time to be on the phone for three or four hours during the day chasing everything up.
Bolt Mortgages has built an entire process to take that stress away. We’ve got people who specialise in getting your mortgage agreed, and others who orchestrate everything else up to the point where you get your keys.
We project manage the whole house buying process, so you can get on with your day job. We’ll deal with the solicitor, chase your estate agents and make sure everybody’s working in tandem. Everything will go through more quickly and with a lot less stress compared to dealing with it all on your own.
Approved by the Openwork Partnership on 25/01/2023
Your home may be repossessed if you do not keep up with your mortgage repayments.