27 May 2015
Take the stress out of moving with Principality
Moving house can be stressful enough, but securing a mortgage on your new property doesn’t have to be. Here, Principality Building Society’s Customer Director Julie Ann Haines shares her tips for current homeowners looking to up sticks and move away.
According to research, the average Brit will move house eight times* in their lifetime. Whether it’s a career choice, to be closer to family, or simply a change of scene, moving house can often be a stressful process.
While it’s easy to get bogged down with all the various elements in moving house, being prepared and knowledgeable will make the process much simpler for you and your family – particularly when it comes to your mortgage. If you’ve got a mortgage but want to move house, there are certain considerations you should make.
Involving your mortgage lender from the get-go will mean you can get advice from qualified advisers and information from the start. It’s also key to do lots of reading up around the subject to ensure you’re all the more well-informed on the matter before the process begins.
One of your very first steps should be to re-check the exact type of mortgage you have, as this can significantly affect your next move. Most mortgages are ‘portable’, which means that you can transfer them from the property that you currently own, to your new home. But, it’s a good idea to speak to your mortgage provider to check if this is the case for you. You may need to borrow more money to secure the mortgage on your new property, which your lender can advise on. It’s also important to bear in mind that there may be a fee for the transfer of your mortgage – a few hundred pounds is typical, so make sure you have budgeted for this if necessary.
Whether you’re in a position to simply transfer your mortgage between properties or not, moving house also throws up a good opportunity to look around for a better deal. Mortgages are becoming increasingly competitive, so make sure that you do your research so that you can take advantage of the mortgages that are out there. Comparison sites like Money Supermarket and Money Saving Expert will be able to give you an overview of the best mortgage deals. But don’t forget, arrangement fees and charges from lenders may in fact make swapping mortgage providers more expensive. Think carefully in this instance, and weigh up your options.
Before committing to a new mortgage provider, it’s important to check whether you have any early redemption fees that apply if you change your existing home loan. Particularly, if you’re still in a special offer introductory period of your loan there are likely to be fees and additional interest charges. To make changing your mortgage provider worthwhile, you’ll need to find a deal that is sufficiently cheaper in order to cover the costs of these potentially outstanding penalties.
Although shopping around for a better deal is always a sensible idea, it’s also important to take into account the ever-changing market. Always bear this in mind. If for any particular reason you find that you can’t move your mortgage between properties - perhaps you are significantly upsizing - your options would be to accept any early redemption penalties and move lenders, or stay put. Therefore, always put a lot of thought into when your next move might be before committing to another mortgage deal, even if it is ‘portable’. You may be better off going for a two or three-year fixed mortgage, which will give you the freedom to shop around when you next decide to move, not restricting you to the same lender. Above all, make sure that you can afford your mortgage both now and in the future when interest rates rises, although your lender will also do this for you when they do your affordability checks.
When moving home, not knowing how much you can borrow or if you’ll even be eligible for a mortgage can often make it an unsettling time. Doing your homework on the subject, and taking the advice of your mortgage lender will ensure you are more aware of the options that are available to you so that you can make the best choice for you and your family. The process of moving house can be stressful enough without mortgage worries too – being savvy in your decisions will ultimately leave you with the best mortgage deal and make moving house the exciting voyage it should be!