Home Mover Mortgages

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Home Mover Mortgages, Yellow Brick Mortgages
Home Mover Mortgages, Yellow Brick Mortgages

Home Mover Mortgages 

All about Home Mover mortgages with Rob Gepp and Tom Butcher.

Approved by The Openwork Partnership on 11/06/2024. 

What is a home mover mortgage?

It’s a mortgage for anyone who is an existing home owner already and is looking to move house.

How does a home mover mortgage differ from a regular mortgage?

There’s no difference. A home mover mortgage is a standard mortgage to help anybody who currently owns a property to move to another property. It follows all the same processes of a normal mortgage.

How long does the application process take for a home mover mortgage?

Exactly the same amount of time as for any other mortgage. The same processes are followed: a fact find, where we get information about the client’s current circumstances, and then finding the option that meets their personal needs. We go through the same steps as for any other mortgage whether it’s First Time Buyers, Buy to Let or anything in between.

What types of properties can be purchased with a home mover mortgage?

Any property as long as it meets that lender’s criteria for acceptable properties.

Are all mortgages portable or are there limitations to this feature when moving home?

No, not all mortgages are portable – it will depend on your circumstances and the details of your current mortgage. There are some people who may have a Help to Buy mortgage at the moment, the terms of which may stop them from porting it to a new property. People who are on the standard variable rate at the moment would not be able to port either.

But generally most mortgages are portable and there are benefits to moving your deal with you – which I’m sure we will cover in a later question.

What are early repayment charges and how can they impact my mortgage?

An early repayment charge is a penalty for ending your mortgage deal before its time. For example, if you’re on a five year fixed rate and you wanted to clear that mortgage after two years, you would be expected to pay an early repayment charge.

How can I keep my existing mortgage deal when moving home? What are the benefits of doing that?

To keep it you would speak to Tom or myself – or any of the consultants at Yellow Brick Mortgages. We will look up the details of your existing mortgage: how much you have left outstanding, what interest rate you’re on and when that rate is due to expire.

We’ll also have a look at any early repayment charges payable to get out of that deal as well. The benefit of keeping your mortgage is that you avoid paying the early repayment charge. You can keep a preferential rate if it’s better than those currently available, and then all you need to do is take a top-up to the outstanding balance to complete the purchase, based on whatever rates are available at the time.

What are the benefits of using a mortgage broker like Yellow Brick Mortgages? How can you help me find a suitable deal?

A good mortgage broker will know the marketplace, which makes for a smoother process during that application period. You would have less hassle finding the right mortgage than if you try and do it on your own.

We will save you a lot of time. We know which lenders to place deals with and who would be suitable for your needs. Plus, we could potentially save you thousands of pounds by getting you the right product.

What is the maximum amount that can be borrowed on a home mover mortgage?

The maximum amount is determined by the individual’s affordability. The lender will have a look at your income and expenditure and work out how much you may be able to borrow.

If your income is over a certain threshold you may be able to get up to five or 5.5 times your income, depending on other circumstances such as the makeup of your family and your liabilities, such as existing credit agreements.

Can I move home in the middle of my mortgage deal?

The simple answer is yes, but what that would look like depends on your circumstances. It might involve porting the mortgage as we’ve discussed, or potentially paying an early repayment charge and taking out a new deal. But yes, you can move in the middle of a mortgage deal.

Can I switch to a new mortgage lender when moving house? What are the potential benefits of doing so?

Yes, you can, and a good broker will determine the right lender for your personal needs and circumstances. Some lenders are happier to lend on different properties than others – and that’s where our expertise really comes in. We make sure it’s the right fit for you.

Some lenders may allow higher amounts of overpayments that might be beneficial to your circumstances. Or they might offer better terms than your existing lender. You may be able to borrow more to fulfil the purchase.

What is a remortgage and how does it differ from a home mover mortgage?

A remortgage quite simply is the process of getting a new mortgage on the house that you currently live in. So it’s slightly different from moving.

With a remortgage you’re usually trying to find a better deal, or potentially borrowing some more money against the property to carry out home improvements or repay some debts. But it’s all focused on the property you already own and that you plan to remain in.

What mortgage options are available to me when moving home?

The first option is to port your mortgage and stay with your existing lender. If the property costs more than your existing one, you just have to take a top-up for the difference between the new purchase price and what you’ve got outstanding on the mortgage.

The other option is to go completely fresh to a new lender and take all of your borrowing with them.

What are the eligibility criteria for a home mover mortgage?

It’s the same criteria as any mortgage you’re looking at, whether that’s a purchase for First Time Buyers, a remortgage or anything like that. The criteria would be the same.

All lenders have their own criteria, so it’s up to us as brokers to make sure we’re picking the right one for you.

What is the minimum deposit required for a home mover mortgage?

The minimum is 5% of the purchase price, depending on the lender and the type of property. Some properties, such as flats, may require a 15% deposit, depending on the lender.

What is the duration of a home mover mortgage?

As with any standard mortgage it really depends on your age and the lender’s maximum wage on an application. It’s also about your budget and how much you’re prepared to pay per month.

It’s not always about getting the longest deal for the cheapest monthly payments. Sometimes it’s about maximising your affordability to reduce the term as well.

What is the process for applying for and receiving a home mover mortgage? How long does it typically take?

It’s exactly the same process as applying for any other mortgage. We just need to know about your needs and circumstances, then have the paperwork to back up what you’re telling us in terms of income and expenditure.

We’ll then find the right deal for you and apply to the mortgage lender. They will check that they’re happy with your paperwork and then instruct a valuation on the property. As long as the property is suitable security to lend against, they will issue a full mortgage offer.

Then it’s over to the solicitors to take you through to legal exchange and completion. The timelines then depend on how many people are involved in that property chain.

You may have to pay an early repayment charge to your existing lender if you remortgage.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up with your mortgage repayments.

The Financial Conduct Authority does not regulate most Buy to Let Mortgages.

Approved by The Openwork Partnership on 11/06/2024. 

Speak To An Expert

Our highly experienced Advisers are ready to help you with either buying or remortgaging a home, protecting your property and lifestyle along with saving you time and effort, ensuring you have a competitive deal right for you.

Podcast approved by The Openwork Partnership on 16/08/2023. 

Home Mover Mortgages

Grace Clarke and James Loizou join us for part 2 of our home mover mortgages podcast.

What are some of the affordable home ownership schemes available when moving home?

There are a few different options you can look at. One, for example, would be a shared ownership mortgage, where you can buy a percentage of a property – say 50% – and pay rent on the other 50% to the local housing authority.

You could eventually ‘staircase’ up until you own 100% of the property. It’s a good way to get the house that you want – but there are only certain properties on these schemes available.

If you’ve owned a property before but have been social renting for a while, you could potentially look at Right to Buy. Here, the council gives you a discount off the property price.

There’s also the deposit unlock scheme, which is quite new, where you can put just a 5% deposit down on certain new build properties. So there are a few different things to look at depending on your circumstances.

What factors should I consider when comparing home mover mortgages?

Your income and outgoings are the main factor. A lot of people have things like loans, credit cards and other financial commitments – even childcare costs – which you have to take into account.

The lender will assess each of these and how they impact your financial situation. That basically determines how much you can borrow when moving home. A big factor these days is your credit score. If you’ve had anything like defaults or CCJs in the past, for example, that can also affect what you could potentially borrow and the rate you’re going to get.

Can I get a home mover mortgage if I’m self-employed?

Yes, absolutely. Lenders assess self-employed income in different ways and it depends if you’re a sole trader, in a partnership or a limited company.

If you’re in a limited company some lenders will work off salary and dividends while others look at net profit. In these circumstances you are better off speaking with a broker because we know who will assess the income in the most favourable way for you.

What’s conveyancing? How long does it typically take when moving house?

It’s essentially the legal bit that solicitors have to do. Unfortunately, we can’t do it ourselves, which would be cheaper, obviously! They make sure the property is correctly transferred to your ownership.

They can take anywhere from eight to 12 weeks. In certain circumstances I have known it to take around four months.

Because solicitors have to do searches, you have to factor in how long they take to come back. But I’d say the average is around three months from when you submit your mortgage application to taking full ownership of the property.

What happens if I can’t keep up with repayments on a home mover mortgage?

Don’t stick your head in the sand – speak with your mortgage lender. Keep them up to date with what’s going on. No lenders actually want to repossess your house, that’s always the last resort. So speak to them. They might help you for a short time, for example by letting you just pay the interest for a while, or giving you a payment holiday.

With those options, do note that they will add any outstanding payments back onto the balance – they’re not giving it to you for free. So just keep them up to date on what’s happening. It is also worth noting that any arrangement made with your lender could impact on your credit score and affect any potential future credit applications, so clarify the impact with your lender before proceeding with any arrangement.

Is it possible to let out my property when moving home with a mortgage? What should I consider?

Most lenders will let you apply for Consent to Let, usually for an agreed period – perhaps six to 12 months. After this time, if you still want to let it out you’d probably have to transfer it to a Buy to Let mortgage, which means moving to a specialist lender.

Usually you must have lived in the property for at least six months before they will consider this. It’s quite a popular option, however. I’ve had clients in the military who are about to be shipped overseas for six months or a year – they’ve been able to rent their property out and get some extra income.

Another common situation is where you’re moving in with a partner and you may want to rent out your home. In a nutshell, yes, it is possible to let out your property.

What are some common mistakes to avoid when taking out a moving house mortgage?

As with any mortgage or new commitment, just make sure you’re comfortable with the repayments. If you’re changing providers, be aware that there could be an early repayment charge or fee. Just make sure that you understand and are comfortable with all the factors involved.

What happens after I have been approved for a home mover mortgage?

Once you’ve got your Agreement in Principle approved you’re in a position to make an offer and have it accepted on a property. You’d then submit your application to the lender and supply all your documents: payslips, bank statements etc. and other things they ask for.

You then inform your solicitor that you’ve applied for the mortgage, tell them which lender and they’ll start that legal process.

What are the current mortgage rates for moving home? How do they compare to rates for First Time Buyers or remortgaging?

Rates don’t really vary much for First Time Buyers, remortgages or moving home. It’s more likely that you’ll find fees differ, or you may get free valuations or cash back.

Rates are changing so rapidly [podcast recorded in June 2023] but typically they are between about five and seven percent at the moment. The actual rate you will get depends on your circumstances and level of deposit.

Is it possible to get a 95% mortgage when moving home?

Yes, there are 95% mortgage options out there if you’ve got a small deposit. It can be a really good option to get on the ladder. You do need to be aware though that typically rates are higher because a smaller deposit means a greater risk for the lender.

You’ve also got the risk that if house prices drop, you could technically be left in negative equity. That means, when you’re coming up for your remortgage in two, three or perhaps five  years, you might possibly owe more than your house is worth, making it very hard to get a new mortgage deal.

How can I speed up the process of completing my moving home mortgage?

Speak to a broker. Get all your information to them as soon as you can – be upfront about all your details and documents. With conveyancers, return any paperwork they need as quickly as possible, and provide ID and proof of deposit without delay.

How can I find out how much I could borrow when moving home? What factors impact this amount?

There are various calculators you can access yourself online for an idea of what you can borrow. But always speak to a broker – we’ll give you an accurate figure based on your current and future commitments.

For example, if you’ve got a baby on the way, you may have to take childcare costs into account. Another thing is overtime, which we find a lot with NHS employees. People get a lot of overtime bonuses that could increase what you can borrow. We will help you work all this out and include it correctly.

What is an Agreement in Principle? How does it differ from a mortgage offer when moving home?

An Agreement in Principle or Decision in Principle are both the same thing. It involves a lender running a credit check on you to assess your basic suitability to borrow.

A formal mortgage offer is what you apply for once you’ve had an offer accepted on a property. It’s when we would supply your payslips, bank statements and other documents to back up what you’ve told them. The lender will assess these documents and make sure everything is correct and fits their criteria. They’ll conduct a valuation on the property and then issue the formal mortgage offer.

So, an agreement in principle is an indication that they are happy to lend and a formal mortgage offer is confirmation that they will lend.

How long does it take to receive an Agreement in Principle?

It can generally be issued straight away, assuming there’s no complicating factors like adverse credit, for example. You don’t need to provide payslips or other documents at this point.

But do be as accurate as you can with regards to your income and stating any outstanding credit. You will need to state what your credit card balance is, for example, and how much you’re paying a month on loans.

You also need a three-year address history to run the Agreement in Principle. You can generally get it the same day as you request it if there are no complications.

Can you explain how to use mortgage calculators available when moving home?

Generally mortgage calculators give you a good indication of what you might be able to borrow. But speak to a professional as well. Some are a bit tricky to fill in and if you make a mistake or put something in the wrong box it could either grossly exaggerate what you can borrow or understate it.

Then, when you go to put an offer on a house you might not be able to afford it. Plus, with self-employed applicants, the difference between net and gross profit etc. can really make a difference to your borrowing total.

Most calculators are quite accurate and you can get a good idea – particularly if you use a professional to complete it for you.

What options are available for remortgaging when moving home?

There are two initial options: to stay with your current lender or switch to a new one. You might move to a lender that’s got a better product. A lot of people are having a shock at the moment, having been on a very low interest rate – and rates have now doubled or tripled since they took their initial rate out.

If you’re moving, though, you can look at ‘porting’ with your existing lender. We tend to use this if you’re stuck in a fixed rate, because otherwise you’d incur an early repayment charge.

If you’ve got three years left on a five year fixed deal, for example – if you move lender you would incur a penalty charge, which is usually a percentage of the initial mortgage loan. Porting simply moves the current mortgage to a new property.

Ultimately, it’s down to the lender’s criteria. They don’t always accept the new property. An example is solar panels – a lot of people were getting them a few years ago and some lenders don’t accept properties with these panels. So it’s always good to do your research prior to moving and speak to a broker for more information.

What are joint mortgages and how can they be helpful when moving home with a partner or family member?

A joint mortgage is where you borrow jointly with somebody else instead of doing it on your own. If you get a mortgage with a friend, family member, partner or spouse, you might well be able to borrow more money than you would on your own. That could mean getting the house of your dreams.

Do be aware, though, that when you apply for a joint mortgage you are both wholly responsible for the whole loan. If one of you changes your mind and disappears, the remaining party is responsible for all of the debt, not just half of it. You are both in it jointly for the full term, for the full amount.

What is stamp duty? How could it impact the cost of my new home?

Stamp duty is a tax from the government when you purchase a property. It’s calculated as a percentage of the purchase price. There are set price brackets to it, and at each bracket upwards you’d pay more stamp duty.

It can add several hundred or even thousands of pounds to the cost of moving, payable on completion. It’s always really important to speak to a tax specialist, accountant or conveyancer to understand the amount you’ll have to put aside for your stamp duty.

How does the value of my current home impact my options when moving house? What should I consider?

The value of your current home will determine how much deposit you’ve got to put down to your onward purchase. It basically sets out what equity you have in the property once you’ve sold and repaid the current mortgage balance.

If you’re buying a significantly more expensive home, you might want to keep some money back for fees, stamp duty and that kind of thing. So it’s important to know how much equity you have, which is basically the cash in your property.

What fees are associated with applying for a mortgage for moving home? How much can I expect to pay?

Some mortgage deals have fees and some don’t. A common one is arrangement fees – a fee to the lender for getting their product. The average arrangement fee is about £1,000.

We always work out if the overall package is good value for money. Sometimes it’s worth paying an arrangement fee if the rate is low enough; other times it’s not.

Then you’ve got all the general fees, stamp duty to which we alluded to earlier, and conveyancing costs.

What happens if I am in negative equity when I want to move home?

If you’re in negative equity, it means you owe more on the mortgage than you can sell your house for. It would be difficult to move in that situation. You’d need to pay a big cash deposit as well. You could put the cash deposit down and then repay the difference in the mortgage.

If you do think you’re at risk of negative equity, try and make as many overpayments as possible to reduce your mortgage balance. That will increase your equity and hopefully get you into positive equity when you’re ready to move.

Think carefully before securing other debts against your home. 

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up with your mortgage repayments.

The Financial Conduct Authority does not regulate most Buy to Let Mortgages.

Approved by The Openwork Partnership on 16/08/2023.

Speak To An Expert

Our highly experienced Advisers are ready to help you with either buying or remortgaging a home, protecting your property and lifestyle along with saving you time and effort, ensuring you have a competitive deal right for you.

Podcast approved by The Openwork Partnership on 10/08/2023.

Home Mover Mortgage

Amelia Arnold and Vikki Fulcher talk us through mortgages for home movers, in part 3 of our podcast.

When should I plan my move and when will I need to secure a conveyancer?

There’s no set way to ever plan a move. Most mortgages are portable if you already have a current mortgage on your property and you’re in a fixed rate. Planning a move is more a case of when the time is right for you. That said, it is a great idea to speak to a mortgage broker before marketing your home, or looking for a new one, to run through all the costs involved with selling and buying and checking your affordability for the needed mortgage, so that you have peace of mind that what you want to achieve is possible and roughly what it will cost.

You would secure a conveyancer at the point of sale, once you have found a buyer and you’ve identified a property to purchase.

What insurance do I need when moving house and taking out a new mortgage?

We always recommend life insurance, which includes multiple options as well as critical illness cover and income protection. These are designed to either repay the mortgage in full or provide a monthly benefit to help cover all your bills: your mortgage, council tax, energy and food. It will get you through a time where you may need a bit of support.

The one insurance that is usually a condition of your mortgage, is buildings insurance. We can help you with obtaining quotes for this type of cover and can ensure the quoted insurance meets your lenders needs, but you are free to arrange this cover elsewhere if you prefer.

What are some of the benefits and concerns related to upsizing or downsizing?

When upsizing you need to consider the increased cost of that home – such as higher council tax and utility bills, alongside a larger mortgage payment. With downsizing you would benefit from lower payments and bills, giving you more disposable income. But you need to ensure that downsizing is right for you long-term.

We sometimes see people downsize for financial reasons, and then a few years later they have run out of space, the family’s grown and things have changed. They need to upsize again.

I always suggest to my clients that they consider the cost involved with the move, especially if you are downsizing, because you have to pay stamp duty, estate agency fees to sell, solicitors’ fees and there could also be mortgage costs involved.

With upsizing, again be sure that it is feasible long term, with any anticipated changes in your lives. If you’re planning on having a family, for example, what impact financially would that have on you? Make sure it’s affordable for the long term.

What are the interest rates for a home mover mortgage?

Rates really depend on how big a deposit you have to put towards the property purchase; what your credit score is like and your income and outgoings. Have you got a car on hire purchase? Things like that can really affect what interest rates are offered to you.

We will always recommend the most suitable deal that’s available to our customers, ensuring you’re paying as little as possible in fees and interest rates considering the overall cost of the products.

Are there any recommended mortgage lenders or products for people moving house?

We always recommend mortgage lenders and products based on the customers’ requirements and the cheapest available deals that meet those needs. We assess every client individually. It’s not a case of one size fits all, and that’s down to lender criteria.

We will look at the loan to value, the deposit and your income and outgoings. We don’t recommend specific lenders as a rule – our recommendations are based on the client’s requirements, the lender criteria and affordability.

Are there any mortgage guides available for people moving home? What topics do they cover?

Absolutely. We have information on moving home on the Yellow Brick Mortgages website. But we would always advise you to come and speak to us about your specific situation. Then we can explain that process for you and guide you.

Sometimes reading guides online can be confusing. You’re getting lots of different information that can sometimes be conflicting. Coming to chat with someone is definitely the best way forward.

How can I get an idea of my home’s value when preparing to move and what factors impact the valuation?

Get some valuations from local estate agents to get a market value of your home. Decluttering can help sell a home, as well as making sure the gardens are clean and tidy.

Present the space as well as you possibly can within your budget. Don’t go out and buy new furniture, but when the estate agent takes the photos of the property, make sure it looks welcoming. Avoid having an empty house or one that’s over-cluttered.

I always recommend my clients to get three different valuations on the property. And don’t tell the other estate agents what you’ve already been quoted. If someone says the home is worth £300,000 and you tell the next estate agent, they’ll tell you it’s worth £320,000 just to try and get that instruction. Make sure that you’re actually getting their opinion, not just them trying to beat the other estate agent. We have a selection of recommended estate agents listed on our website under other services – selling your home.

What are some of the most frequently asked questions about moving home?

The most frequently asked questions are normally about the process. People want to know how to proceed – from firstly searching for a new home and then obviously applying for the mortgage. They also ask about the costs involved – how much is stamp duty, what the mortgage repayments are, when to instruct a solicitor and how much will that cost.

People often ask us to recommend a solicitor, because obviously it’s a big expense and you want to make sure you’ve got the right people helping you along.

What are some hints and tips for successfully moving home? How can I avoid common mistakes?

My first bit of advice is not to stress. They do say that moving home is one of the most stressful things we can do – but worrying and getting stressed doesn’t make the situation any easier and it won’t solve anything.

A lot of people have expectations on timescales and how long a sale and purchase should take. This can create frustration in the process. Try to let it go, let it happen. Try to look forward to your move, especially if you’re upsizing to a nice family home.

In terms of common mistakes, do make sure you get those three separate estate agent valuations. Don’t always go with the highest quote – a lot of estate agents unfortunately do overprice things just to try and get that instruction. Potentially you will sit on the market for months.

If you’ve seen properties that you would like to buy, make sure you’re marketing your own property at a fair price. If there’s an estate agent you’d like to work with but you weren’t happy with what they quoted, tell them what you want to market it for. It’s your property.

Can you recommend a reputable solicitor to handle the legal work for my home mover mortgage?

We work with multiple solicitors and we can recommend one for all different aspects of buying and selling. If you’re looking at a shared ownership property, for example, we can recommend the best solicitor for that. If you’re looking at Right to Buy, again we have an appropriate solicitor for those. We’ve got a panel of solicitors to recommend depending on your situation.

What is a product fee and how does it differ from other fees associated with a mortgage for moving home?

A product fee is charged by the lender. It doesn’t affect your mortgage. It’s a fee that the lender charges for arranging that mortgage for you. The fee can either be paid up front or added to the mortgage.

If you do add the fee to the mortgage, additional interest will be charged on it. If the fee is £990, for example, that will be added to the mortgage and interest will be charged on it. It’s completely different to any broker fees, survey fees, solicitor fees etc. It is solely charged by the lender.

Often the rates with arrangement or product fees have lower rates than those without, which is where we come in to weigh up all costs over the product term, to ensure you are recommended the cheapest overall suitable product taking all these factors into account.

Can you explain the different cash back offers available on a mortgage for moving home? What’s the eco home reward and Club Lloyd’s cashback?

A lot of lenders will offer better deals if you’ve got an eco home. If it’s got an A or B rating on your EPC these usually come with cashback. Club Lloyds deals aren’t available through brokers, so I wouldn’t be able to advise on those products.

But the world is now focused on making everything a lot more eco-friendly, so you can get those cashback rewards on an energy efficient home.

What are the next steps after deciding to move home and applying for a mortgage?

Consider what date you would like to complete on your sale and purchase. For instance, when I bought my last home I said I would like to complete on 30 August. I confirmed that to the rest of the chain and we all worked towards that day to give us a goal.

It’s not set in stone until exchange, obviously, but if there are multiple property sales and purchases within a chain it’s good to have a goal ahead. It makes everything easier with arranging removals etc.

What happens after I have submitted my full mortgage application?

After you submit the full application, it will go through to underwriting. Any surveys required will be carried out and reported back to the lender and the buyer. Once all these points have been satisfied by the lender they’ll then issue the mortgage offer, which is usually valid for six months. 

Your home may be repossessed if you do not keep up with your mortgage repayments.

Approved by The Openwork Partnership on 10/08/2023.

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