I’m Moving – Should I Take My Mortgage with Me?
If you’re ready to make your next move, there’s plenty of things to get your head around. Not least, what should you do about your current mortgage?
It should be a relatively easy process (should!). Here’s a few tips to consider.
- Before you start pressing your nose up against estate agents’ windows, get in touch with your current lender.
Most mortgages are movable. Transferring your mortgage from the property you currently live in to the one you want to move to is called ‘Porting’. See if this is something your mortgage company would be happy to do for you. When you find the home you want to move to, they’ll want to value it before agreeing to move your mortgage and there are fees involved. Porting usually costs around £200.
- Even though you have been with your current mortgage company for a considerable time and have a squeaky-clean track record with them, you may be told that they will not consider giving you more money. Don’t take offence. It’s nothing personal. It’s just the way things are.
- You may prefer to take the opportunity to shop around for a new mortgage deal.
Before going down this road, check the paperwork for your current mortgage and see if there are any penalties to pay for doing this. There could be additional interest charges if you’re still in a special offer period or on a fixed or discounted deal.
You need to make sure any new mortgage is cheaper when you factor in these additional costs.
- If your current deal is penalty free (result!), there are plenty of competitive deals on the market for those moving home. Again, don’t be too easily swayed by initial figures. You’ll need to look closely at the cost of arrangement fees and other hidden costs that lenders may charge. These will be added to the mortgage value and the headline rate of interest payable so can quickly jack up the figures.
- Whether you opt for porting or a new mortgage, you’ll still have to undergo a credit assessment. In recent times, this has got tougher and you’ll find you get asked a lot more probing questions than you did originally. Even if things your end haven’t changed (e.g. you’re still paid the same amount of money) the criteria for mortgage companies has. They’re a lot stricter, so tread carefully.
On a final note, if you find yourself backed down a one-way street and that isn’t where you want to live, consider talking to a financial advisor.
They’ll charge a fee for their services (ask what it is before you agree to meet them) but will help guide you through the mortgage maze and make decisions that are right for you.