Moving home is a major milestone, filled with a mix of excitement and potential stress.
Whether you’re upgrading to a larger space, downsizing for a change of pace, or relocating for a fresh start, the financial side of things shouldn’t feel overwhelming.
That’s where a mortgage specialist can help.
An independent mortgage expert, understands the complexities of mortgages for movers. They will work closely with you to find the best deals, simplify the process, and help you get settled into your new home with financial peace of mind.
Take the hassle out of securing your mortgage.
First time buyer
As a first time buyer, your mortgage choices will be a little different to someone who is already a homeowner.
You may want to begin by learning about first time buyer mortgages, alternatively our first time buyer guide walks you through the process of buying a home.
Your mortgage options
When you’re moving home, you have a few different routes to take regarding your mortgage. These choices will depend on your current situation.
Let’s explore the main options:
- Porting Your Current Mortgage
- Taking Out a New Mortgage
Porting Your Mortgage
This means transferring your current mortgage deal, including the interest rate and any remaining fixed-term period, to your new property.
Porting is often a good option if you’re happy with your existing deal and want to avoid potential early repayment charges.
This option involves staying with your current lender. You will have to apply for the new mortgage and then pass all of the lenders normal checks.
(You don’t have to borrow exactly the same amount as now)
Taking Out a New Mortgage
There are several reasons why you might want a completely new mortgage.
If you’re moving to a more expensive property, you’ll likely need to borrow a larger amount. Additionally, you might find better interest rates or more flexible terms with a new mortgage, especially if your current deal is ending soon.
The new mortgage is used to pay off the one you have now, with any additional borrowing being put towards the new property.
Is porting the best option?
By porting your mortgage rate you get to avoid paying ERC fees and you keep the same interest rate. But you have to stay with the same lender.
If your financial circumstances have changed since you first took out the mortgage, it’s possible that your lender will not approve your new mortgage application. This could relate to your employment situation or maybe credit issues.
They also need to be happy with the property you wish to buy. If the property is unusual or built using non-standard construction then your lender may not accept it.
In these situations you would have to decide whether to go with a new lender and give up the advantages of porting.
How much can you borrow
Before you start looking at new properties it’s a good idea to find out how much you could borrow, and how much the repayments are.
Our mortgage calculator will give you an idea of how much you could borrow for a residential mortgage.
It takes just a few seconds to input your earnings and then see what is possible.
A mortgage adviser will be able to give you a more accurate figure to work from, after learning about your income and expenditure.
Mortgages for professionals
If you are a qualified professional then you should be able to borrow more money with a professional mortgage.
These are only available to certain occupations, such as; doctors, dentists, solicitors, teachers, engineers etc.
Choosing a New Mortgage
Getting a new mortgage for your home move involves decisions that will affect your finances for years to come. Let’s look at some of the key choices you’ll have:
Interest rates
Fixed-Rate: Your interest rate stays the same for a set period (usually 2-5 years), providing stability and predictable payments.
Variable-Rate: Interest rates can fluctuate based on market conditions. There are different types, like tracker mortgages that directly follow the Bank of England base rate. These can offer lower initial rates but carry the risk of payment increases.
Repayment methods
Repayment Mortgage: The most common type, where you gradually pay off both the capital (the original loan amount) and interest over the mortgage term.
Interest-Only Mortgage: You only pay the interest each month, requiring a separate plan to repay the capital at the end of the term.
Mortgage term
The term is the length of time over which you’ll repay the mortgage. A typical term is 25-30 years, but shorter or longer terms are available. A shorter term generally means higher monthly payments. Longer terms offer lower monthly payments but cost more in interest over time.
Deposit size
The size of your deposit significantly impacts the mortgage rates you qualify for. Generally, the larger your deposit, the lower the interest rates offered by lenders.
Offset
If you regularly have savings or unused funds then an offset mortgage could be one to consider. It links your savings to your mortgage so that you pay less in interest.
Family & friends
If you’re struggling to qualify for the mortgage you need then maybe a family member can help. They could join you and apply for a guarantor mortgage or JBSP mortgage. Or there’s a family offset mortgage option.
Mortgage Deposits
You still need to have a deposit when moving home.
Most people will use their home equity for the mortgage deposit. This cash sum is effectively ‘moved’ by your solicitor, from one property to another.
You are also able to add any cash savings to increase the size of the deposit. Getting a mortgage when you have a high deposit will generally mean having more choice and cheaper rates.
There’s still plenty of options if you have a lower deposit and some lenders also accept a deposit from your family!
Related reading:
How can a broker help
Well, for a start you won’t have to spend hours trawling through lender websites to find a deal that you might qualify for.
A whole of market mortgage broker has access to over 100 lenders, and 1000’s of different mortgage deals.
It’s their job not just to find the best deal, but the best deal that is most likely to be approved.
They can save you hours and hours of time and reduce the stress that goes with that.
A mortgage adviser is also an expert at problem solving.
So if you have a complex income setup, have experienced some bad credit, think that the property is ex-local authority or you don’t have 3 years of self-employed accounts, a broker is your best bet.
Agreement in Principle Explained
An Agreement in Principle (AIP), also known as a Decision in Principle or Mortgage in Principle, is a preliminary indication from a lender about how much they might be willing to lend you.
It’s a valuable tool when moving home, and here’s why:
Understanding Your Budget
An AIP gives you a clearer picture of your affordability, allowing you to search for properties within a realistic price range.
Strengthening Your Offer
When you make an offer on a house, an AIP shows the seller that you’re serious, your finances have been pre-checked, and you’re more likely to secure a mortgage. This can give you an advantage in a competitive market.
Speeding Up the Process
Once you’ve found a property, having an AIP can make the formal mortgage application smoother, potentially saving you valuable time when moving home.
How to Get an AIP
You can apply for an AIP directly with a lender or through a mortgage broker.
A broker has the advantage of checking with multiple lenders, potentially finding you better rates and comparing different deals before you get an AIP.
The Agreement in Principle process usually involves providing information about your income, expenditure, debts, and credit history. Lenders will do a soft credit check, which doesn’t impact your credit score.
An AIP is a provisional offer, not a guarantee of a mortgage. Lenders will carry out a full assessment and property valuation when you make your formal mortgage application.
Why would you use a mortgage broker instead of a bank?
When you’re looking to get a mortgage, you might wonder whether to use a bank or a mortgage broker. While banks are a familiar choice, many are now turning to mortgage brokers for this important step. We explore why a mortgage broker can be a better option than going direct to a bank.
When is the best time to apply for a mortgage?
While there’s no single “perfect” moment, leaving plenty of time for preparation puts you in the best position for success when applying for a mortgage.
Think of it as a process with several key stages.
You will spend a lot more time ‘getting ready’ to apply for a mortgage.
If at all possible, contact an independent mortgage broker 1-2 months before you even start looking at new homes.
Apart from showing you what you can afford, they will be able to help with all of this:
Getting Mortgage Ready
Start by gathering all the necessary paperwork, such as payslips, bank statements, and proof of ID.
Having this organised will streamline the application later. Additionally, checking your credit report and taking steps toward a good credit score can significantly improve your chances of mortgage approval with favourable terms.
An Agreement in Principle (AIP) is also beneficial during this stage as it provides a realistic picture of what you might be able to borrow, making you a more desirable buyer.
Knowing What You Can Afford
It’s tempting to start browsing properties right away, but understanding your budget beforehand saves time and heartache.
Use online affordability calculators for a general idea, but for the most personalised assessment, consult a mortgage broker. They’ll consider your specific financial situation to provide a clearer picture of your borrowing potential.
Applying for the Mortgage
You need to wait until you’ve found a property you’re serious about before formally applying for a mortgage.
While an AIP is helpful, full mortgage offers will have an expiry date and always relate to a specific property. So you can’t really submit a full mortgage application until your offer to buy a particular house has been accepted.
Additionally, factor in that the mortgage underwriting process can take a 2-4 weeks.
How do joint mortgages work?
Having a joint mortgage with someone else will normally mean you can have a larger mortgage. Two incomes are better than one.
While most people will take out a joint mortgage with their spouse or partner, you can buy a house with friends and even your parents!
The mortgage process can take several weeks, depending on the complexity of your application and the lender’s speed. Working with a broker can often streamline the process. It’s good to start the mortgage process early, especially if you need an Agreement in Principle.
Potentially, yes. Some lenders allow you to port your existing mortgage while increasing your borrowing amount. However, the amount you can borrow will depend on affordability checks and the value of your new property.
Yes, even if you port your mortgage, your lender will require a new valuation of the property you are buying. This ensures the mortgage amount is appropriate for the property’s current value.
While not strictly necessary, an AIP is very beneficial. It gives you a clearer idea of how much you can borrow and shows sellers that you’re a serious buyer, strengthening your offer.
Absolutely! Some lenders specialise in mortgages for self-employed individuals. A mortgage broker can help you find the right lenders and explain the required documentation.
Gifted deposits are accepted by many lenders.
However, lenders may require a “gifted deposit letter” confirming that the funds are a gift and not a loan that needs repayment.
While a poor credit history can make securing a mortgage more challenging, it’s not impossible. Specialist lenders may offer mortgages for those with bad credit. A broker can help assess your options.
Yes, you can.
Equity is the difference between your home’s value and your remaining mortgage. When you sell, you can use your equity as a deposit on your new home. Just remember to factor in mortgage fees and general moving home costs.
This relates to portability. If your fixed rate is ‘portable’ it means the lender will give you the opportunity to take the fixed rate with you when you move.
No, the choice is yours.
Put simply, if you port the mortgage deal then you should avoid paying ERC’s. If you don’t port it then ERC’s will be payable.
While not mandatory, mortgage life insurance is highly recommended. It ensures your mortgage is paid off if you pass away, protecting your loved ones from inheriting the debt.
No, you don’t (unless you are porting).
In fact, switching lenders often allows you to find a more competitive deal, especially if your current mortgage is about to end. A broker can compare a wide range of lenders and rates to find the best fit for your situation.
Usually yes, but check your specific mortgage terms. Some lenders allow unlimited overpayments, others have annual limits, and some charge early repayment penalties if you go over a certain amount. Flexibility for overpayments can help you pay off your mortgage faster.
Yes, some lenders offer mortgages tailored to new-build properties. New builds tend to have a long time between exchange of contract and completion. The lender (and you) need to take this into account.
Some lenders have maximum age limits on when your mortgage term must end. This can make it trickier if you’re older. However, there are specialist lenders catering to older borrowers – a broker is essential in these cases.
Related reading:
Interest only mortgages are certainly still around, but lenders don’t like them very much. When you do apply for one expect the lender to need very specific details on how you intend on paying them back!
Yes you can, as this is becoming very popular. Having a joint mortgage with your parents could allow you to have a bigger mortgage.
A family deposit mortgage is a special kind of mortgage that makes it easier to buy a house if you can’t save a lot of money for a deposit. With a family deposit mortgage, your family can use their savings to help you out.
Currently, the longest mortgage term available is 40 years. Extended mortgages, or marathon mortgages, that exceed the traditional 25-year term, are becoming increasingly popular.
Ready to explore your options?
If you’re just about to start a new mortgage journey and could use the guiding hand of a professional, don’t hesitate to reach out to a reputable mortgage broker.
An independent mortgage broker can access over 100 lenders on your behalf. They will make the process smoother and more profitable than going it alone.
Keep reading, keep asking questions. The more you know, the better decisions you can make.
