Home Mover Mortgages

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Home Mover Mortgages

Sam Hubbard joins us to explain how the mortgage process works for home movers.

What types of properties can be purchased as a home mover? What type of mortgage can I get as a home mover?

Effectively, it’s any property, provided it’s habitable and it meets the lender’s criteria. There are no restrictions because you’re moving home. Generally the majority of products are going to be available for somebody moving home, with no restrictions.

What is a Mortgage in Principle and how do I get one as a home mover?

A Mortgage in Principle, an Agreement in Principle, or a Decision in Principle, are all the same thing, it’s just different terminology.

An Agreement in Principle is considered as important for First Time Buyers, but sometimes not as much for home movers. I wouldn’t necessarily agree with that.

I think getting a mortgage agreed in principle, even as a home mover, is a really good idea. It offers a sense of security for the person wanting to move home and confidence in their home buying journey.

It confirms how much they can borrow and whether they fit lenders’ criteria, and demonstrates that the home mover has taken all the necessary steps and planned carefully. That can make them a lot more attractive to both an estate agent and a property vendor.

You can get a Mortgage in Principle direct from a lender, but we’d always recommend speaking with a broker. We will provide you with a broader choice of potentially better rates, more flexible criteria, and hopefully greater borrowing power.

How long does the mortgage application process take for a home mover?

The application process shouldn’t take very long. It’s really helpful to get organised so you can provide the lender or broker with all the information and supporting documentation that the lender is likely to request.

It’s getting together proof of income, which is usually three months payslips if you’re employed. If you’re self-employed, it’s your tax calculations and tax year overviews for the last couple of years.

Lenders are also likely to want the latest three months’ bank statements, proof of ID and proof of address. By quickly providing this information to the broker, obtaining a mortgage Agreement in Principle, and subsequently a mortgage application, shouldn’t take more than a couple of days.

If there are time restrictions because you want to place an offer and urgently need an Agreement in Principle, we can move that forward very quickly, providing we’ve received all the necessary information.

You would generally receive a mortgage offer around 10 to 15 days from the application being made, subject to a lender’s service levels at the time.

What’s the maximum amount that can be borrowed on a mortgage as a home mover?

The maximum borrowing will very much depend on your individual circumstances, and every lender has differing affordability calculations. The amount they will lend can vary dramatically.

Obviously, that could mean the difference between attaining the dream home or not. So doing research on this is really important.

This is where a broker can really help. As brokers we have access to most lenders’ affordability calculators, and we can easily determine which lenders can provide the required loan amount. We review from there which lenders offer the most suitable and cost effective terms.

What is the minimum deposit required?

Typically you’re going to need a minimum of 5%, but the greater the deposit, the better – as it reduces risk to the lender. Lenders will offer slightly improved interest rates as you put more deposit into the deal.

What are the eligibility criteria for a mortgage as a home mover?

Effectively, lenders’ criteria is generally the same whether you’re a home mover, a First Time Buyer or you’re remortgaging. They’re looking at whether the loan is affordable and whether the property type is acceptable to them. There isn’t really an awful lot of difference for a home mover.

As we touched on, each lender has their own acceptability criteria. Where we can help as a broker is to find the most suitable lender for you, where you’re going to be accepted for the loan you want on the most appropriate terms.

Some lenders will accept leaseholds, some won’t. Some will accept flats above a certain number of floors, others won’t. Criteria is very unique to every lender, so speaking to a broker can really define that and benefit a client.

Can I get a mortgage as a home mover if I have bad credit?

Generally, yes, but there are lots of caveats here. It does depend on how bad the credit file is and how recently there have been any issues such as late payments, defaults or maybe even County Court Judgements.

As brokers, we have access to many lenders who can assist with this type of situation.
Like any other mortgage requirement, we just have to fully understand the financial picture to find the right solution.

If you have experienced bad credit, don’t give up hope. Please speak with us. We may have solutions available and if we can’t assist, we always advise on steps to repair the credit file and explain when an application may be acceptable in future.

There are plenty of lenders who operate in this market – it’s a case of fine tuning to find the right one to help in somebody’s individual circumstances.

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Buying/selling a property or making sure you are on the right mortgage deal can be stressful. That’s where we come in, let us take the stress away with a personal, speedy, and professional service.

What does porting a mortgage mean?

Porting is transferring an existing mortgage. If you’ve already got a mortgage and you decide to move house, you can effectively lift and shift that mortgage to a new property.

It can help avoid paying early repayment charges, which really benefits mortgage holders who want to move to a new home and keep their current mortgage terms. If you took a mortgage out a couple of years ago, the rates are likely to be lower than you get today, so you may want to keep that rate. You may also want to retain that lender, and even sometimes the loan amount.

Porting can be advantageous for those looking to move and wanting to keep favourable terms. However, it is essential to understand the process and any associated costs thoroughly before proceeding.

We always recommend speaking to us in this situation. We can review the terms of the existing deal and compare that with the overall costs of other borrowing options. On many occasions, when somebody wants to port, they’ll probably want to borrow a little bit more money as well – so it’s always good to check out the details.

What is the duration of a home mover mortgage?

As with any mortgage, the loan term is typically dependent on people’s monthly budget – i.e. how much they want to spend, and equally, how much the monthly repayment costs will be.

Lenders’ criteria, again, will come into play here. Lenders will tend to set a maximum term that might be based on future retirement age. We will always try to work it to fit your affordability – especially if there’s a set monthly cost you want to achieve.

Maybe that doesn’t fit within the initial 21 year term, as an example, in which case we may look for a lender to take it to 25 years to meet that comfortable monthly cost. It emphasises again why speaking with a broker can help – we may need to speak to different lenders and find different solutions to fit the amount you can afford with a comfortable term.

What are the fees associated with a mortgage as a home mover?

Typical fees include the lender arrangement fee, and some lenders may have a booking fee. Surveys and valuation fees may be payable, and there’s a broker fee, obviously, from our point of view. Stamp duty needs to be considered, and also conveyancing solicitor fees.

Some mortgage deals will have fees and some won’t. When we review your options for moving home, we’ll demonstrate within our research the right deals with and without fees. Then, you can make an informed decision on which is right for you.

We provide all our clients with a recommendation for the most suitable mortgage for their personal requirements, taking fees into account as well.

What happens if I can’t keep up with repayments on my mortgage as a home mover?

The worst case scenario is as per that standard caveat, that your home may be repossessed if you do not keep up repayments on your mortgage.

If you have difficulty paying, it is important to speak openly. Talk to the lender and us as the broker and don’t delay that conversation. Lenders genuinely do want to help, and as brokers we can review the situation to see if there are alternative options, depending on the circumstances.

Lenders may be able to assist with lower monthly payments for a period of time, give a payment holiday or perhaps switch you to interest only for a while to help reduce costs. There are options, and the right thing to do is discuss it with the lender and potentially the broker.

Is it more difficult to get a mortgage as a home mover if I’m self-employed?

No. It shouldn’t be any more difficult if you’re self-employed. Lenders just want to see proof of income, whether you’re employed or self-employed. But for the self-employed, they generally want to see your income over a two-year period, although certain lenders may consider a one-year history.

Lenders assess self-employed income differently for a sole trader, a partnership or a limited company. If you’re in a limited company, for example, some lenders will work off salary and dividends, while others may look at net profit.

In these circumstances, you’re better off speaking with a broker because we can assess which is going to be most favourable to you. Equally, the difference between net and gross profits can significantly affect the total borrowing amount.

Your tax calculation history is paramount if you’re self-employed. Lenders will calculate the overall affordability differently, so a broker can make a difference in achieving your true borrowing potential – because each lender will frame it totally differently.

Again, it’s about getting your ducks in a row. It’s about making sure your tax returns are completed, you’ve got the last couple of years’ documents and you’ve paid the tax – because that’s what lenders want to see.

What else do we need to know about mortgages for a home mover?

Having done this for many years, I know that a mortgage broker can be incredibly valuable when moving home.

Just to summarise how we can help, it’s about accessing a wide range of lenders and products. It’s expertise and advice, and saving time and effort. We offer assistance if there have been credit issues, and find the solutions to that.

It’s gaining pre-approval and making sure the mortgage fits within your budget, and comparing deals from across the market. We also coordinate with professionals such as the lender, estate agents and conveyancers to make that journey as smooth as possible.

We also provide ongoing support at the scheme end, when a deal’s finishing. We look at how we can save you money again in the future. Having a trusted long-term relationship with your broker provides valuable ongoing support. It saves time, stress and potentially money.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

Our standard fee for arranging a mortgage is £395. The fee is due upon applying for a mortgage loan with the lender.