Moving to new home can be the ideal opportunity to review your existing mortgage to ensure it will meet your new needs. Most mortgages are portable which means you can take it across to a new property subject to meeting your existing lenders conditions and any administration costs.
If you are buying a larger property you may need to borrow more and if you have come to the end of a promotional period with your existing lender, you could save on your monthly payments by finding the best deal for your circumstances.
With independent advice from London City Mortgages we can show you how to make the mortgage payments as affordable as possible when moving home. We can help you find the best mortgage deal and make the online remortgage process easy for you.
Your borrowing needs
Before you make an offer on a new property you should work out if you will need to borrow more. If you have been in your existing property for a number of years the property price is likely to be higher so you can release more equity from the existing property.
This equity would form the deposit for the new property and how much you can borrow will depend on your income and your ability to afford the size of the new mortgage loan.
All lenders will base the amount you can borrow on your income and affordability checks take account of your outgoings such as child care, holidays and living costs before they provide the loan. Lenders also look at multiples of income to determine the maximum they are prepared to lend and this can be 4 or 5 times a single or joint income.
Your current lender is likely to allow you to use your existing mortgage to transfer to a new property. To do this will would apply income and affordability checks and make a mortgage transfer charge which is typically several hundred pounds.
If you have a large amount of equity in your property, you could consider let to buy where you keep your existing property as an investment and release some of the equity as a deposit on a new property. The existing property is rented out and you move to a new property and in this situation it would be worth speaking to a mortgage adviser to arrange the two types of mortgages.
Consider remortgaging
When you move house you may want to take advantage of this opportunity to make changes to your existing mortgage or borrow more. If this is the case, it could be worth looking at the whole mortgage market again to find the best deal for you.
Ideally you would have come to the end of any introductory offer and have no exit penalties to pay for moving to a new provider. Even if you did not have to increase the amount you need to borrow there are advantages to remortgaging.
In particular you may want to change the type of mortgage. If you started with a discounted variable mortgage two or three years ago you may want to know for certain your payments will not change and go for a fixed rate mortgage instead.
If you think interest rates are going to increase, this is also a good reason for going for a fixed rate mortgage. If you are borrowing more the interest costs are going to be higher so you could be offered a better deal from another lender.
Take into account the interest rate for the mortgage and compare the total costs over the introductory offer period. This will usually be for two or three years although some lenders can offer longer term periods. The longer the term of the mortgage the higher will be the interest rate.
Lenders usually have an application fee which can be added to the mortgage loan so you need to take this into account when comparing the costs of your existing lender and remortgaging to a new lender.
Applying for a remortgage
The application process for a remortgage for a house move is very similar to any other application. If you are applying through London City Mortgages the application can be completed for any mortgage lender online 24/7 on a pc, tablet or phone. You can upload any other documentation direct to your application such as payslips, bank statements, proof if identity and address.
You have an advantage when you move home compared to buying for the first time as you are likely to have a larger deposit and a history or regularly paying your mortgage which reduces the risk for any new lender. This can improve rate offered and ease of securing the mortgage.
Our advisers can check the maximum amount you can borrow and search the whole market for the lender offering best mortgage deal for your circumstances.
Once the lender has received your application they will conduct a credit and affordability check before making an offer for the mortgage. Remember also that the lender would also need a valuation for the new property and often this is paid by the lender.
If you are taking the let to buy route where you keep your existing property to rent as an investment and release equity for the new property, you would need to arrange two mortgages.