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04th July 2018
A new home can mean a new start, a clean slate for a future full of opportunities. That’s not to say everything has to be left behind though – transferring, or “porting” your existing mortgage to a new property is a great way of keeping consistency and minimising hassle in a time of upheaval. There are some things you should know first however, so whether you’re upsizing, downsizing or simply need to lie low for a while (we won’t tell) read on to decide if porting a mortgage is a wise move for you.
Asking a lender to port a mortgage is a little like applying for a new driving license. The details will still be on file but you might have to re-qualify according to current standards. If your financial status has changed or your lender has become far stricter about who they lend to, you may find that your application can be denied.
To minimise these risks make sure you’ve kept up with payments so far and have a stable source of income to ensure future security. It’s also worth keeping an eye on outgoings and current debt levels to make sure you’re in a similar or better position than you were when you applied for your initial mortgage.
Moving property can often mean moving to a more expensive one. With this in mind, many apply with the aim of securing a higher borrowing amount. However, not every lender will agree to this, especially if you’re already close to the existing borrowing limit. Occasionally a lender will agree to an additional sum, on the condition that it comes from an additional mortgage product. This means having two loans for a while, often with a higher interest rate being levied. It’s therefore worth doing a bit of research before asking your lender to port your mortgage.
Prospective lenders may not take you seriously until you begin the process of selling your existing property, needing the details and the address of your new property before getting involved in a deal. It’s therefore worth checking whether you’re likely to qualify and sorting out all the vital aspects before making an application.
Porting a mortgage can work out cheaper, negating the costly exit fees that can come from leaving an existing mortgage early. However, the sheer range of options available in the open market can sometimes result in cheaper mortgage rates, with savings outweighing these fees. The penalty fee tends to be higher the longer a deal has to run, meaning that it’s generally better to port when there are years left on a mortgage and switch if there are only months left to run.
There’s no steadfast rule that serves every scenario, so it’s worth doing the maths to see whether you’ll end up saving a significant amount in the long term. Make sure to include arrangement fees and any other potential add-ons to get an accurate figure.
At IMC we know the excitement that moving home brings, so whether you’re seeking to transfer one of our existing mortgages, thinking of finding a cheaper deal, or simply wanting a friendly piece of advice, get in touch! Our dedicated team of experts would be delighted to help.
If you are interested in the services we have to offer, all you have to do is call 020 3761 6942 or click the link and fill in our quick and easy enquiry form.