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Home mover/purchase


So, You’re on the move.

Let’s jump right into it and point out the first thing you should be thinking about…Is your current property mortgaged?

No? then you can skip the next couple of paragraphs. If it is, then please ensure you have followed the steps below and avoid possibly spending thousands in fees that you hadn’t anticipated. Your Home may be repossessed if you do not keep up with the repayments on your mortgage.


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Does your current deal have an early repayment charge? If you opted for a fixed rate then the answer is most likely to be ‘yes’, but what does that mean for you?

Well, if you have a significant amount of time left before your fixed-rate ends and the early repayment charge expires then you could be forced to pay a large exit fee. For the most part, this can be avoided with careful planning and choosing the right product but you still may be restricted. Here are some ways that you could overcome the ERC:

Porting / FURTHER ADVANCE

This is where your current lender allows you to take your current mortgage with you to your new property and may potentially allow you to ‘top up’ your mortgage to borrow more if needed.

Pay the ERC

You could pay it and be free to move forward but it can be very costly to do so. If it was an unexpected cost, is it going to derail your plans?
You could add it to the mortgage, but this will mean you pay interest on it and so the true value of the ERC keeps growing. If you are looking to buy a new property and then let your current property out, please refer to our buy-to-let tab under ‘let-to-buy or consent-to let’



Wait

A simple solution but it comes with its own cost-patience. As frustrating as it may be the best solution for you may well be to wait and see out the deal and be free to exit the mortgage at a more financially beneficial time.

First things first - if you haven’t had a mortgage in several years, or you inherited a property but you’ve never had a mortgage- you are not a first-time buyer anymore. A first-time buyer is someone who has never owned a property. Therefore, you will now be part of the ‘home-movers’ club’.

As far as deals are concerned there are very few first-time buyer exclusives available so you are not missing much. However, you will have to acknowledge stamp duty. We are not legal advisors so cannot provide legal advice, but we can tell you that it is very important to ensure you have looked into the potential repercussions.

Are you in a chain?

It’s the thing that’s most likely to slow the process down so you need to ensure you let your broker know if other parties are dragging their heels so we can make sure your offer has plenty of time to spare. Most lenders’ offers are valid for 6 months but some are only valid for 3. Equally, to keep the ball rolling, you need to provide documents and communications quickly to do your part to ensure speed is maintained.

Relocating to a different area?

If you are relocating to a different area of the country and starting a new job, you do not need of started your new job. There are plenty of lenders who offer mortgages based on your new contract. If you are not relocating but have recently changed jobs, the same rules apply. However, if your new job comes with a large commute, the lenders are likely to consider the cost of travel. Therefore, you must be forthcoming with any information like this to avoid disappointment further down the line.

Buying a second home as a holiday home?

If you are buying a second home as a holiday home or a property for the week to be closer to work, you should consider the loan to value. Most lenders will require at least a 20% deposit, stamp duty for 2nd properties will be implemented and of course, overall costs will be considered. Before the lender works through these costs, have you budgeted for 2 lots of council tax, rates, internet, and of course furnishing the property- do you have the funds for this? Remember, it means buying a second toaster, bed, linen, cutlery, etc. These costs add up and need to be considered both personally and for lending purposes to make sure it is a worthwhile and affordable investment.