Will Binks explains the home buying process.
How does the mortgage application process work when you’re moving house?
There’s a lot to consider when you’re moving home, and a lot depends on the type of mortgage you have. In some situations we can go to your existing lender and borrow more funds. In others it makes sense to go to a different lender. An important factor is whether you are within a fixed rate deal and if any early repayment charges will apply to change lender.
The costs of moving are important to think about, as well as the level of affordability for your next property. If you’re upsizing – buying a larger, more expensive property – are you using the equity from your current home to fund the deposit? Have you got any savings in the background that could help with affordability? There’s a lot to explore.
Are there any additional costs to consider when moving home?
If you’re selling a property there will be estate agent fees to allow for. Potentially, when you bought your current property you were under the threshold for stamp duty – whereas now you will almost certainly be liable for this, so you need to consider that in your calculations.
You also need to allow for solicitor fees and removal services. Some people move into rented accommodation to avoid getting stuck in a property chain – again this will have a cost attached. If all your furniture won’t fit into that rented accommodation you may need to to consider storage costs as well.
What report or survey do I choose?
Surveys are down to your personal choice. The lender would certainly carry out a survey so that they can deem the property suitable security for the loan. A lot of lenders offer a free valuation – but that’s for their benefit only.
You could instead get a home buyer’s report which would be a small cost to you. Here, a surveyor goes out and does a general review of the property and reports back to you. Alternatively you could go for a full structural survey – checking everything from the roof down to fittings, flooring and general structure.
It’s all down to circumstances and how you feel. Obviously you’ve been out to view the property and have got an idea, but it can give you peace of mind to get a survey done as well, especially if it’s an older property.
Can I port my mortgage to a new property?
This is down to your lenders’ terms and conditions. Porting can be a little confusing, and it’s important to understand that it’s the actual mortgage product that you’re porting, not necessarily just the amount.
For instance, let’s say you’ve got a fixed interest rate of 2% and you’re tied in to the product, so you face early repayment charges if you exit that fixed rate deal. Porting is appealing, as it means you can avoid that penalty fee. But it’s important to check affordability and not just assume you can port.
Perhaps your circumstances have changed since you bought the original property. If your income has dropped or your credit score has changed, you might not be approved to port your deal to the new house. It’s certainly worth getting that affordability checked first. Give us a call and we can make sure that everything is going to fit for you.
How can a Mortgage Broker help?
There’s a lot that goes on when you’re buying a new home and a lot of money involved. So please reach out to us if there’s any uncertainty at all. We’ll do our best to explain all the Jargon and make everything a bit clearer for you.
Your property may be repossessed if you do not keep up with your mortgage repayments.