Home Mover Mortgages
- We have helped 1000’s of people to secure a mortgage.
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Home Mover Mortgage
Kevin talks us through mortgages for people who are planning to move home.
What types of properties can be purchased as a home mover? What type of mortgage can I get as a home mover?
All types of property can be mortgaged – houses, flats, maisonettes, bungalows, new builds, shared ownerships, holiday homes and listed properties. If it’s a building and you’re not able to move it, you can probably get a mortgage secured on it.
What is a Mortgage in Principle or Agreement in Principle and how do I get one as a home mover?
An Agreement in Principle is preliminary mortgage approval, where a lender completes affordability checks and also a credit check. They’re also known as Decisions in Principle or Mortgage Promises.
In my opinion, an Agreement in Principle is very underrated. They’re free, a massive confidence booster and often a necessary document to secure your next new home. I don’t understand why you wouldn’t have one before going through the hassle of listing your home within an estate agent and keeping your home tidy for viewings.
An Agreement in Principle is as good as the information provided. It’s extremely important that you have a good advisor that’s going to ask you the right questions and gather the finer details of your circumstances. We describe an Agreement in Principle as a comfort blanket.
They don’t tie you to a lender or to Number One Mortgages, and they don’t cost anything. If a better deal comes along once you actually have an offer accepted, we can move to a new lender. If, for any reason, that doesn’t go to plan, we go back to our comfort blanket.
In short, get an Agreement in Principle before you have an estate agent round to value your home.
How long does the mortgage application process take for a home mover?
Firstly, let’s define what a mortgage application is. The Agreement in Principle is effectively stage one of an application. It can’t be fully submitted until you’ve had an offer accepted, as an application needs a property address, estate agent details and solicitors’ details before we can press the button and submit.
Once your offer is accepted, we recommend applying for a mortgage within a week or so. The mortgage application instructs the surveyor to complete the valuation of the property, which is an important step in the process.
On average, from application to formal mortgage offer it normally takes four to six weeks. Our processes have been refined over the 20 years of trading – we typically get offers out within two to three weeks from application.
What is the maximum amount that can be borrowed on a mortgage as a home mover? What is the minimum deposit required for a home mover?
Some lenders are very generous and will lend up to six times your income. Most lenders, however, will lend 4.5 or five times income. It’s easy to talk about income multiples but in reality that isn’t how it works.
Lenders typically use 60% of overtime, bonuses and commission, and the regulator, the Financial Conduct Authority, requires lenders to assess affordability on all new mortgages. Therefore, it’s rarely ever as simple as borrowing six times your income.
A great broker like us will ask questions to find out the finer details of your income, commitments and expenditure. Our research includes affordability assessments, to confirm what your borrowing capacity is – your purchasing power. That’s information you can rely on, which is really important. You will also want to know what the monthly payments are and whether they’re within your comfort zone.
What are the eligibility criteria for a mortgage as a home mover?
When it comes to securing a mortgage, you need an income, whether that’s from employment, self-employment or you’re a limited company director. It could be a pension, contractor income or income from rental properties. You need to be able to afford the mortgage payments, and have a deposit in place.
Can I get a mortgage as a home mover, if I have bad credit?
Yes. It does of course depend on how bad your credit is. We always ask for a copy of the client’s credit profile so we know what we’re working with. Our experience is vast, and we know lenders on the high street as well as less well known lenders that accept clients with historic bad credit.
If you have a county court judgement, defaults or missed payments, we work out what can be achieved. If it’s not possible right now, we give you tips on how to improve your credit profile to achieve your goal in the future.
SPEAK TO AN EXPERT
We will save you time by researching the market, checking that you meet the lenders criteria to find the best mortgage for your circumstance.
What does porting a mortgage mean?
You don’t port your mortgage, you actually port your mortgage product. A mortgage is secured on the property, and you’re going to buy a new home. The main benefit of porting your product is that you avoid early repayment penalties.
But because it’s a new mortgage, under Financial Conduct Authority regulations, the same lender has a requirement to run affordability and criteria checks. It’s not a given that you’d be able to transfer the product to the new property.
Often people will be looking to borrow more money, in which case the extra borrowing on a new product will almost certainly have a different end date to the product that you’re looking to port. When your ported product ends, you’ll be tied into the other product. That often means you end up remortgaging twice as often. Ultimately, to bring the two products together you usually end up paying an early redemption charge.
It’s just a case of timing. If interest rates have been going up and you’re porting, invariably you’re taking a top up product. When interest rates are going down, it’s more complicated. We do all the number crunching so you can make the right decisions around porting the product. So it’s recommended not to go straight to your lender – get the advice first.
What is the duration of a home mover mortgage?
The choice is usually led by affordability and how quickly you’d want the mortgage paid off. Most people want it repaid by their planned retirement age. However, many lenders will lend to age 75, based on your current income.
If circumstances are presented correctly to a lender, you can get terms for up to 40 years. The longer you borrow the money over, the more interest you pay, so it’s important to find a good balance between affordability and being sensible, which often requires some good advice.
What fees are associated with a mortgage as a home mover?
There are lots of fees to consider when looking to move, so we always provide a document explaining what those costs involve. Not only does it share a breakdown of the costs involved with selling and buying a home, it also gives you a summary of how the home buying process works and typical timescales.
Costs that do need to be considered include estate agents fees, potential mortgage redemption penalties and solicitors costs – to both sell and buy. Often the biggest cost is stamp duty.
We consider ourselves to be home buying experts, which involves a lot more than just securing a mortgage product for your circumstance and objectives. We actually complete desktop research on the property you wish to offer on, with tips about how to present that offer and negotiate the right price.
We can get solicitors quotes and recommend those that have a good reputation. The same for surveyors, too, to check out the condition of the property that you’re purchasing. We even recommend estate agents that offer good value services.
What happens if I can’t keep up with repayments on my mortgage as a home mover?
Well, sadly, your home may be repossessed if you do not keep up repayments on your mortgage. That’s why it’s important to ensure you only commit yourself to monthly payments that are within your comfort zone.
It’s also important to be financially resilient if circumstances change. You might have a growing family and one parent will return to work part time who is currently working full time. You might plan to set up a business, or something less positive could happen, like becoming ill or a loved one passing away. We give advice and recommendations to keep you financially secure.
Is it more difficult to get a mortgage as a home mover if I’m self-employed?
Many brokers often say no to this, but we’re transparent here and to be honest, yes it is. There’s a lot more strategy involved. We describe it internally as a game of chess, where the piece you move on the board will influence whether you’re going to win or lose. It’s all about how your income is presented and which lender we approach for your circumstances.
Having been trading for over 20 years, and loving the geekiness of playing chess, we consider ourselves to be amongst the very best for finding mortgage deals for the self-employed, limited company owners and contractors. It all starts with a chat about your circumstances and objectives, then we go off to complete the research, working towards those goals.
How can a mortgage broker help with mortgages for home movers?
If you are looking to move home or want to put a plan in place to move over next year or so, a great mortgage broker is going to give you confidence and increase your chances of achieving your goal.
Talk to a mortgage broker the moment you are considering a move. It will save you hours, days, possibly even weeks of wondering what’s possible. We always recommend that you chat to us before committing to put your home on the market with an estate agent.
If you’ve got any questions or want some advice, we’re here to help. Just reach out.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
Your home move in 4 simple steps
Step 1
Book a time to chat over your objectives and circumstances with a personal home buying expert / mortgage adviser.
Step 2
Let your personal mortgage adviser save you time by working out all the costs, researching the market and giving you the confidence to move home.
Step 3
When you have found a buyer and a property to purchase, your mortgage adviser will apply online for the best mortgage for you.
Step 4
Get the advice you need, speak with an independent expert today!
What you need to know…
You will need to find out how much you can borrow, how much you will be able to use as a deposit after the selling and purchasing costs, and the monthly payments to accurately assess your maximum purchasing power. It is best to have an expert give you the guidance you need and advice before putting your property on the market.
The actual amount you can borrow will depend on your credit commitments, your regular monthly outgoings and how each lender assesses your income.
Lender’s affordability checks can differ meaning that the amount you can borrow may change from lender to lender. That’s where the expertise of our personal advisers comes in and where our independent status benefits you.
Because we are independent mortgage brokers we will be able to secure you the best deal for your circumstance.
There are costs associated with selling and buying your new home. When selling your current home, you will need to consider estate agency fees, legal fees to sell and any potential mortgage penalties if applicable. With your onward purchase potential costs include legal fees, a survey fee, stamp duty (which is a property land tax) and administration fees. Within selling and buying you may want to clear some debt from the sale proceeds to make your overall monthly outgoings more affordable. Our personal advisers can give you guidance and advice within a free consultation.
An Agreement in Principle, also known as a ‘Decision in Principle’ will be provided by a lender after affordability and credit checks have been approved. An Agreement in Principle is extremely useful to increase your confidence before putting your property on the market also when viewing and offering on properties. Estate Agents will typically want to see an Agreement in Principle before presenting your offer to a seller. Our personal advisers can help you with this.
Being accepted for a mortgage does depend on your circumstances. We are experts with all types of mortgages… We specialise in obtaining mortgages for the self-employed, contractors, construction industry scheme (CIS) workers and those with historic adverse credit (as well as employed customers too of course). In all these situations we can frequently secure high street deals. Being independent and experts is a real benefit in these circumstances.
Your monthly payments will vary depending to your chosen mortgage term, choice of mortgage product, how much deposit you have and repayment type. It is best to chat with a personal independent adviser to find out exactly what interest rate and term you can secure to give an accurate monthly payment.
A local estate agent will generally offer better value for money than an online agent. A local agent is probably going to be more expensive than an online agent however they have the local knowledge to value your property accurately, will arrange the viewings, conduct personal viewings at short notice, provide necessary feedback and negotiate the best price from the buyer. Both online agents and estate agents will typically use web portals like Rightmove, Zoopla and On The Market. Our mortgage experts can help you make the decision and discuss costs.