A home mover is what we call someone that owns a property, but wants to move to a new one. When you are considering moving home it’s important to consider your options and your entire situation.
The biggest thing when moving house is you don’t necessarily need a new mortgage, quite often you can transfer (or Port) your mortgage to a new property, taking it with you and topping it up as needed.
This will vary from lender to lender. It also varies depending on your outgoings. This means that if you have credit cards, loans etc this will be taken into account when they are calculating how much you can borrow. It’s probably best to speak to a mortgage broker that can steer you in the right direction.
For home movers the following chart usually applies:
*Currently due to the government measures on Covid-19 you will pay nothing up to £500,000
This is the biggest one before you start looking at properties. Worth speaking to a broker who can give you an idea of how much you can borrow. You’ll also need to consider legal fee’s, stamp duty, moving costs and mortgage broker fees if there are any.
The next step would be to get a mortgage in principle, this is a statement from a lender on how much money you can borrow in principle. An estate agent is likely to take you more seriously if you have one before you go see a property. Sometimes this may be called a decision in principle or agreement in principle.
Getting the right solicitor can mean everything in a house purchase, if you don’t have one, ask your mortgage broker, they may know some good ones. Usually we would recommend you shop local, but with solicitors it’s important they are on the Lenders approved panel. Best to make sure before you instruct anyone.
So you found a home, got a mortgage broker, got a mortgage in principle, got a solicitor and put in your mortgage application, what’s next? Well once the lender has checked the value of the property, and have checked you, they will issue a mortgage offer with how much they are willing to lend.
There are many different types of home mover mortgage. The most common are Fixed rate mortgages, Discount rate mortgages and tracker rate mortgages.
This is the most common type of residential mortgage. With a fixed rate mortgage your interest rate is fixed for the period. Therefore your monthly payments are the same every month until the end of the product.
Discount Rate Mortgages tend to be a discount on the lenders variable rate. This means if the lender puts their variable rate up or down your monthly payments will likewise go up and down. This can be good when rates are low, but not if they go up. They lack the stability of knowing your monthly outgoings will be the same each month.
This type of mortgage usually tracks the Bank of England base rate. So it goes up or down depending on what the base rate does. It can often have a cap or collar that stops the interest rate going over or under certain rates.
A home mover mortgage is generally the same types of mortgages as any mortgage. There may be some mortgages specifically for First time buyers that you can’t use. However for the most part they will be the same or similar products. When you are considering a home move you should speak to your Bank, Lender or a Mortgage Advisor to discuss your options.
Absolutely! The Shared ownership scheme is available to first time buyers and home movers as long as you fit the schemes criteria. If you’re considering the shared ownership scheme speak to the Housing Association or a specialist Mortgage advisor for Shared Ownership to see what your options are.
The easiest way to get a better interest rate is to have a lower loan to value. For example if you have a purchase price of £300,000, and a deposit of £50,000 your interest rate won’t usually be as good as if you had a deposit of £100,000. The other way is to speak to a Mortgage Advisor, as they will likely have access to far more products than your Bank will.
There are loads of things that come into what lender is best for a home mover. And it won’t be the same for all of us. Where you are buying, how much you are buying for, your credit history, your income all have bearings on which lender is best for you. We often say to speak to your Bank or a Mortgage advisor to discuss your options. However actually a mortgage advisor will be better able to advise you on the best product for you. This is because they have access to tens of thousands of products usually, whereas your bank will only have access to their own.