Moving house when you already have a mortgage can seem daunting, but understanding the process can help make the transition smoother. Whether you’re upsizing, downsizing, or just looking for a change of scenery, there are several options to consider when moving with an existing mortgage. This step-by-step guide explores the key stages and considerations involved in moving house with a mortgage, aiming to provide clarity and guidance through each phase of your move.
Step 1: Assessing Your Current Mortgage
Before making any decisions about moving, it’s crucial to assess your current mortgage. Look at your mortgage terms, the outstanding balance, and any early repayment charges you might face if you pay off your mortgage early. Contact your mortgage lender to discuss your intentions and find out detailed information about your current deal, including any penalties or fees associated with leaving your mortgage early.
Step 2: Deciding to Port Your Mortgage or Apply for a New One
Porting Your Mortgage
Many mortgage products are portable, which means you can transfer your existing mortgage to a new property without facing penalties. This is particularly beneficial if your current mortgage has a competitive interest rate.
Steps to Port Your Mortgage:
- Check if Your Mortgage is Portable: Review your mortgage terms or speak with your lender.
- Eligibility for Porting: Ensure the new property meets your lender’s criteria.
- Application: You must apply for porting, which involves a full assessment by your lender as if you were applying for a new mortgage.
Applying for a New Mortgage
If porting is not an option, or you find a better deal elsewhere, you might consider applying for a new mortgage. This involves:
- Research: Compare different mortgage deals on the market to find the one that suits your needs.
- Application: Apply for a new mortgage, which will include affordability checks and a credit assessment.
- Valuation: Your new lender will require a valuation of the new property to ensure it offers sufficient security for the loan.
Step 3: Selling Your Current Home
Selling your existing home is often the next step unless you plan to retain it and let it out.
Key Actions Include:
- Valuation: Have your property valued by local estate agents to set a realistic selling price.
- Marketing: Choose an estate agent to market your property or consider an online service to potentially save on fees.
- Legal Preparations: Engage a solicitor to handle the conveyancing process necessary for the sale.
Step 4: Finding a New Home
While you are selling your current home, you can also start looking for a new one. This process involves:
- Determining Your Budget: Based on the portability and conditions of your existing or new mortgage.
- House Hunting: Visit potential properties that fit your budget and needs.
- Making an Offer: Once you find the right property, make an offer through your estate agent.
Step 5: The Mortgage Application Process
If you are applying for a new mortgage or porting your existing one, the process typically involves:
- Proof of Income: Provide your lender with evidence of your income and any other financial details required.
- Credit Checks: Your lender will perform credit checks to assess your financial stability.
- Property Appraisal: The lender will appraise the new property to ensure it is a suitable security for the mortgage.
Step 6: Completing the Purchase
Once your offer is accepted, and your mortgage application is approved, the completion stage includes:
- Conveyancing: Your solicitor will handle all legal aspects of the purchase.
- Exchange of Contracts: Both parties commit to the transaction legally and financially.
- Completion: This is the final stage where funds are transferred from your mortgage lender to the seller, and you can move into your new home.
Step 7: Moving In
After completion, you can begin the physical process of moving into your new home. This involves:
- Planning the Move: Organise removal services and prepare for the actual moving day.
- Setting Up Utilities: Ensure all utilities are set up in your name from the day you move in.
- Final Checks: Do a final walkthrough of the property to ensure everything is as agreed upon in the sale.
Moving house with a mortgage requires careful planning and consideration but understanding these steps can help you manage the process efficiently and effectively. Whether porting your mortgage or securing a new one, the key to a smooth transition is preparation and clear communication with all parties involved.
