Home Mover Mortgages
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Home Mover Mortgage
Charlie explains home mover mortgages and what’s involved in buying a new property.What is a Home Mover Mortgage?
Basically, a home mover mortgage applies when somebody is selling their current home and looking to purchase a new property simultaneously.
What is a Mortgage in Principle and how do I get one as a home mover?
A Mortgage in Principle is basically an agreement that a lender will lend an amount of money, subject to full mortgage underwriting valuation of the property.
It would consist of a credit check from a credit agency. Most lenders use Experian, Equifax or Transunion – or a mixture of two or even three of them.
How long does the mortgage application process take for a home mover?
It depends on the size of the chain, but it probably takes around three to four months.
What is the minimum deposit required for a home mover?
The minimum is 5% as a home mover. You are effectively taking out a new mortgage, so providing you don’t have a second property in the background, a 5% deposit should be sufficient.
What are the eligibility criteria for mortgage as a home mover?
They may be different from lender to lender. They include your income and existing credit commitments.
If there is anything that you think could be a stumbling block, it’s best to bring it up with your broker at your initial consultation. We can then source a lender where that criteria problem won’t cause any issues.
Can I get a mortgage as a home mover if I have bad credit?
Absolutely. Even with bad credit it’s possible to get a mortgage. We have access to specialist lenders who are able to assist in this area.
If we aren’t able to get a mortgage straight away, we will advise how to improve your credit score and review things at a later date, once your rating improves.
What type of properties can be purchased as a home mover?
You can pretty much buy any type of property provided it’s habitable and for residential use. Some lenders may not like certain properties, but the benefit of using a broker is the wide range of lenders we have access to. If a property isn’t right for one lender, it could well be acceptable to another.
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What is porting?
We get asked this question a lot. It’s basically when you take your existing mortgage to your next purchase.
For instance, if you are fixed in for a long period on a really favourable interest rate and want to purchase somewhere else, you wouldn’t lose that low rate. You can effectively port it over to the new property.
If you need extra money to reach the new purchase price, you just take up a top-up mortgage with the same lender from their existing product range. This way, you avoid paying any exit fees and you’re able to keep your existing interest rate.
What are the interest rates for a mortgage as a home mover?
Obviously this can vary. It depends on what deposit you’re putting down, what the fixed term is and the type of mortgage you’re looking for. It’s hard to give an exact rate without knowing the full details.
What are the fees associated with a mortgage as a home mover?
Following your initial consultation, we will give you your maximum potential borrowing and an indication of your fees. Typically, you’re looking at around £800 to £900 for sales solicitors and for purchase solicitors it would be around £1,500.
Additional costs and fees you may come up against included upgraded valuation fees, stamp duty and agent fees. You would also need to consider broker fees during the mortgage process.
What happens if I can’t keep up with the repayments of my mortgage as a home mover?
The government has introduced something called the Mortgage Charter, to help anyone who is struggling with the increased cost of their mortgage over the short term.
If you don’t think you can keep up with your payments, contact your mortgage lender and they may offer one of the following options – a temporary mortgage payment holiday, a temporary switch to interest only payments, or extending the mortgage term to reduce the monthly payments.
Can I get a mortgage as a home mover if I’m self-employed?
Yes, absolutely you can get a mortgage being self-employed, provided you’ve been trading for at least one year.
Most lenders would like to see two years’ tax calculations and overviews before they’re able to consider you. That’s effectively two years’ accounts. Lenders usually take an average of the last two years, however some may consider the latest year if the income is higher.
This is one of the perks of seeing a mortgage broker – we know which lenders to go to.
What advice do you have for someone currently going through this right now?
It’s really important to see a mortgage broker as soon as possible. A firm like Midas will be able to give you an indication of what you can afford on your next purchase. Feel free to contact us at any time and we’ll be happy to help you.
Please note: Your home may be repossessed if you do not keep up with your mortgage repayments.