Home Mover Mortgages
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Your home may be repossessed if you do not keep up repayments on your mortgage
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Home Mover Mortgage
What types of properties can be purchased as a home mover? What type of mortgage can I get as a home mover?
If you’re moving home, the only real stipulation from a lender is that the property you’re buying is defined as residential. This means you’ll be living in the house or flat you’re buying. It also needs to be in a decent, habitable condition.
What is a Mortgage in Principle and how do I get one as a home mover?
A Mortgage in Principle is also known as a Decision in Principle. It’s a statement from a lender that approves your borrowing. The lender will say how much they are prepared to offer when you apply for a mortgage.
We can provide you with an Agreement in Principle once we’ve discussed your situation and your goals. We want to see what you’re looking to achieve and make sure that you can reach your goals – both now and in the future.
An Agreement in Principle puts you in a better position when you view properties. A lot of estate agents want to see that you are ready to proceed, so this is an ideal way of proving that. Coupling the Agreement in Principle with evidence of your deposit puts you in a really strong position – it shows you can get the mortgage and you have the deposit ready to buy.
How long does the mortgage application process take for a home mover?
It varies case by case, and also lender by lender. Some lenders offer a really fast service, but at the time of applying, they might not have the very best rate available.
Generally, you’d be looking at around eight weeks for the mortgage application itself, and then getting the keys and moving in can take longer. It depends how quickly the solicitor can deal with all the legal paperwork.
What is the maximum amount that can be borrowed on a mortgage as a home mover? What is the minimum deposit required?
A couple of lenders are doing some unique deals where they base their lending upon rent you’ve been paying. Another lender just requires a £500 deposit. But in most cases, you’re looking at a minimum of 5% [podcast recorded in September 2024].
For example, if someone’s looking at a property at £300,000, they’d need at least £15,000 for the deposit. But the bigger the deposit, the better the rates you could get, so if someone’s got more savings, it would definitely help.
How much you can borrow also varies lender to lender. With a bigger deposit, lenders can be a bit more generous. Anywhere between 4.5 and 5.5 times your income is the typical amount from lenders at present.
What are the eligibility criteria for a mortgage as a home mover?
You would essentially need to pay off your current mortgage and then purchase the new property. A lot of lenders will allow you to ‘port’ your current mortgage over.
We would obviously look at the specifics of your situation and if you are porting your mortgage, whether that’s the best thing to do. Would it be better to take a new mortgage out? We will make a specific recommendation based on the numbers involved.
Can I get a mortgage as a home mover if I have bad credit?
Yes, although it would depend on the severity of the bad credit. Lenders will all have a look at your credit history and based on what’s on the credit report, they will decide whether they can lend or not.
Some standard lenders are more comfortable with credit glitches, and if they’re more specialist you might pay a tad more on the rate. There are definitely lenders out there that would love to help.
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What does porting a mortgage mean?
It’s where you take the mortgage product you’re on, with the amount outstanding, and you move that over to the new property.
For example, if you were on an old mortgage with a rate of 2.5%, you wouldn’t want to lose that. You would port that over to the new home, because obviously rates today are higher [podcast recorded in September 2024].
What is the duration of a home mover mortgage?
It can be anything up to 40 years, in most cases. We would assess your affordability, however, because there’s no point in taking out a mortgage for 40 years and paying lots of interest if you can afford to pay it off faster.
Some lenders can lend past retirement – giving mortgages to customers in their 80s and 90s – but generally 40 years is the maximum term.
What are the fees associated with a mortgage as a home mover?
Mortgage fees are pretty standard, no matter whether you’re buying your first or second house. Lenders generally charge a fee, and it can be a reflection of the rate of interest. They might charge a £1,500 arrangement fee, but you would get a better rate than on a deal with no fees or a small arrangement fee.
It really does vary lender to lender. Most mortgage brokers also charge a fee to cover their time and admin team, if they have one.
There will potentially be a valuation fee as well, depending on the age and condition of the property you’re buying.
What happens if I can’t keep up with repayments on my mortgage as a home mover?
First, the lender would write to you to point out that you haven’t paid your mortgage. Don’t put your head in the sand, go back and speak to them as soon as possible.
If there is a genuine reason, for example, an illness or loss of job, most lenders will take a sensible approach. They may allow you to miss some payments or make part payments. When you get back on your feet, they will generally allow you to catch up.
If that’s not possible or the situation is very severe, you have two choices. You could sell the property yourself, or the lender could commence possession proceedings. That’s the last thing you want – you’ve put a lot of time, effort and money into that home, and there’s an emotional connection.
If your property is repossessed, for a period of time it would be very difficult to get another mortgage because you would be on the Lender’s Register.
But there’s a lot you can do to avoid that. Lenders have signed up to a Mortgage Charter, which means they may be able to give you an interest-only mortgage for a period of time, reduce the payments or extend the term. There are options out there.
Is it more difficult to get a mortgage as a home mover if I’m self-employed?
No, not necessarily. Some lenders will lend to somebody with just one year’s worth of trading history, providing they can evidence their earnings. The longer the track record of being self-employed, the more choice of lenders.
But generally, no, you’ve got the same options as someone who is employed
How can a mortgage broker help a home mover?
We’ll help you look for the right mortgage based on your specific circumstances. We’ll research the mortgage, gather information and come up with the right mortgage for you.
For someone to do it themselves would take time – and could be quite frustrating. How do you find out whether the lender will lend to you or not? Will you get through to somebody by phone only to not get the answer you’re hoping for? We’ll save you all that time – that’s our job.
We’ll possibly be able to save you money, too. Sometimes deals are only available to mortgage intermediaries and could be better than anything you could get from that lender directly.
Moving house can be a really stressful period. We’ve got a fantastic team of administrators to manage that process from start to finish, to get you into that property with as little stress as possible. We’ll make it all happen for you.
Mortgage Style Ltd, trading as Mortgage Style, is an appointed representative of the H L Partnership Limited, which is authorised and regulated by the Financial Conduct Authority.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE REPAYMENTS.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but will range from £495 to £595 and this will be discussed and agreed with you at the earliest opportunity.