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What Are Home Mover Mortgages?

What does Home Mover mean?

If you have a current residential mortgage on your home and are looking to move to a new home, then you’re classed as a Home Mover. A Home Mover mortgage is used to move to a new home or simply to change your lender or current mortgage deal. There are two main choices open to Home Movers, porting your mortgage or remortgaging.

What is Porting?

When you move to a new property, most lenders are able to transfer your mortgage to the new property. This is called porting your mortgage and has the benefit of being able to remain on the same deal when moving house. Although considered as a transfer, porting your existing mortgage requires a new mortgage offer. This means that you’ll need to go through the mortgage application process again, including paying arrangement fees, valuation fees, stamp duty and proving your income, much like your original mortgage application. It’s important to realise that you can be refused when applying to port your mortgage, even though the same mortgage was approved previously. This is particularly true if your financial situation or credit score has deteriorated or your new home is higher value, meaning your monthly repayments will be higher. Although some lenders allow you to leave your current mortgage deal without liability for early repayment charges, when you port your mortgage, this will vary between lenders. Each lender has their own criteria and speaking to one of our Mortgage Advisers will help you to understand your options.

Can I increase my loan amount when I port?

In some cases you will have the opportunity to increase your loan amount when porting your mortgage, however this will vary based both on the lender’s criteria and your circumstances. An increase in loan will be assessed like a new application, so you’ll need to prove that you can afford the higher repayments on your mortgage. Some lenders will not offer you the option to increase your loan when you port your mortgage and will therefore insist that you take out an additional mortgage to pay for the additional loan requirement, on top of the ported mortgage. This could mean that you end up with two different mortgage rates and two sets of different terms.

Can I decrease my loan when I port?

When you are moving to downsize and therefore intend to decrease your loan amount, then porting your mortgage is ordinarily still an option. Whilst most lenders allow you to decrease your loan by up to 10%, if you want to reduce the loan by more than 10% you’re likely to have to repay the difference between the two loan amounts to your lender.

How do I know if porting is right for me?

There are a number of factors you should consider before deciding whether porting your mortgage is the right choice for you. First of all, whether it is even an option, as some mortgage terms do not include a porting option. If this is the case, in which case remortgaging would be your only choice. You should also consider your current circumstances before applying. There are some circumstances which will mean you are declined and in other situations, you may get more financial benefits from remortgaging. Porting options and criteria vary between lenders so your first step is to contact your lender to determine what choices you have. You can also speak to our brokers here at Vivid Mortgages for guidance. We can explain how each option will benefit you specifically, based on your individual circumstances.

Remortgaging

For those Home Movers who don’t have the option to port their mortgage or would prefer not to, you could consider a product transfer with your existing lender or remortgaging with a new lender. If you choose to stay with your current lender and transfer to a new mortgage product, this does not necessarily preclude you from paying early exit fees to leave your current mortgage.

Choosing the right time to remortgage, if this is your chosen option, can be critical. There are a range of circumstances where you will be able to save money from remortgaging. Equally, there are situations where you are unlikely to benefit from it, such as high exit fees or only a small duration left on your existing mortgage term.

Does the value of your current or new home affect your options?

Upsizing to a higher value home will always be more challenging than downsizing. Whether you choose to port your existing mortgage or remortgage with a newlender, you’ll need to meet the affordability and credit scoring criteria for the larger loan. This will be easier if you have gained a lot of equity in your home due to an increase in property value. Your options will be more limited if you have Negative Equity in your home (you owe more than your home’s current value. In these circumstances it’s unlikely lenders will accept applications for a remortgage or to port your mortgage. You may be able to downsize to reduce the negative equity, but bear in mind that you will still have to pay the difference back to the lender where you decrease the loan by more than 10%.

How a Mortgage Broker can help find you the most appropriate deal

At Vivid Mortgages our brokers can help you decide whether Porting or Remortgaging is the most suited option for you, based on your individual circumstances. We will look at your existing terms and your finances, to determine whether you would benefit from changing lenders and even find you competitive deals that meet your exact requirements. Whichever Home Mover Mortgage path you choose, we can take much of the administrative burden out of the application process.

Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.  

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