Moving with a mortgage: your options

by Housesimple on 7th September 2016

On average, UK homeowners remain in their properties for 21 years. With so long between moves, many people have already paid off their mortgage before packing their things. However, having a mortgage doesn’t stop you from moving house: you just need to be aware of your options.

Portable payments

Many mortgages are portable, meaning they can be transferred to a different house than the one originally purchased. The first thing to do is talk to your current mortgage lender or broker though, to ensure this is definitely the case.

If you’re planning to purchase a more expensive property, you may need to borrow more or even apply for an additional loan from your lender – sometimes with a high interest rate. While porting (moving) your mortgage may seem like the most convenient choice, it’s not always the most economical. Make sure you do your calculations.

Some things can affect the possibility of moving house when you have a mortgage. If you’re in negative equity – where the value of your mortgage exceeds the value of your house – it may be impossible for you to move. While some lenders offer “portable negative equity”, it might not be worth moving until after house prices rise again.

New house, new mortgage

If you can’t port your mortgage, there are two choices. You can either pay the penalties on your current mortgage for ending it early, or put off moving house till your contract is over.

If you do decide to take out a new mortgage or switch lenders, there are some things to be aware of. There is often a fee for transferring your mortgage. This tends to be a few hundred pounds but could be more. While you could re-mortgage your house for a better deal, there are likely to be penalties or fees on your previous loan.

If you took out your previous mortgage pre-2008, it will have been assessed on much more lenient criteria. There is a chance you may not meet the current assessment criteria, as it has got stricter since the financial crisis. If possible, consult an independent mortgage advisor to help you better understand your optimum mortgage strategy.

However complicated mortgages might be, private house sales don’t have to be. With, it’s never been easier to move.

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