So, you’ve decided to sell your home. Whatever the reason – be it upsizing, downsizing, or moving out of the area completely – selling a property can be a challenging – but extremely rewarding undertaking.
At Brookings, we support first-time sellers by highlighting everything you need to know about making the sale, from valuation and marketing to mortgages and the legal process.
Today we wanted to offer guidance on MORTGAGES…..
What to do with your existing mortgage
While you and your family may be moving to a new home, your mortgage cannot always come with you. That’s because your mortgage ties to your existing property.
So, what are your options?
Mortgage porting
Mortgage porting is the process of transferring your existing mortgage to your new property. But that isn’t always as straightforward as it sounds. You need to start a new application, and, you may need to increase or decrease the size of your mortgage.
If you are upsizing, you must prove that you can afford the new property, meaning you may need to reveal your wages, outgoings, and other financial commitments to your lender.
The new mortgage may also feature new terms and include an arrangement fee – but could help you avoid an early repayment fee if your existing fixed-term mortgage has yet to run its course.
For all new mortgages, your lender will likely carry out a valuation of your new home, plus have a surveyor check the structural soundness of the property.
Find a NEW lender
Alternatively, you could take out a new mortgage with a new lender or a new deal with your existing provider. Doing so may fetch you better rates and terms. However, you must remain mindful that if you hold a current fixed-rate mortgage by doing so, you could be met with an early repayment or exit fee – usually between one and five per cent of the total value left on your existing deal.
Like mortgage porting, your chosen lender may ask to examine your finances to assess whether you can afford the new property and carry out a valuation and structural survey.
Negative equity
If your current home has decreased in value faster than you have repaid your mortgage, you may be in “negative equity”, which will make it difficult to port or remortgage, but not impossible. Talk to your existing lender and see what help they can give you. Some lenders also specialise in negative equity loans. Negative equity mortgages will cost more but may help you complete your desire to move sooner than anticipated.
Get expert help today
Rest assured, although there is much to consider, our team are on hand to help guide you and offer the best advice for your circumstance. The first and often most difficult step is to make the initial telephone call/email enquiry. Let us help by supplying you with our free tailored financial overview.
For more help and advice selling your property, get in touch with our expert team today.
