Moving house is never easy. Aside from arranging the whole logistics of removal companies, selling agents and the legal process, most of us will need to navigate the mortgage process too.
How does the mortgage application process work if you’re moving house?
Before you’ve even started looking for a house, we’d normally suggest you get a decision in principle and check what you can afford. You can get a decision in principle with any mortgage lender. This document will rely on the information you tell the lender, and information on your credit file to give you an indication of what you might be able to borrow.
This document is different to a mortgage offer because the lender has not had a real person assess your case yet.
You’ll usually need your decision in principle and proof of deposit to prove to an estate agent that you can afford to buy the property.
Once you’ve had an offer accepted, you’ll submit a full mortgage application to a mortgage lender. At this point, you’ll need to select your mortgage term, rate type and product type. Finding the right lender and the most suitable product is where good advice can come in handy.
When the lender receives your mortgage application, they’ll normally ask for documents such as payslips and bank statements, they’ll also typically want to instruct a valuation on your new home.
All things being well, once the lender is happy with your application, documents and valuation, your mortgage offer will be issued!
Are there any additional costs to think about when moving home?
I’m afraid there are additional costs. For a home mover, you could expect to incur the following costs:
- Solicitors Fees
- Stamp Duty or Land Transaction Tax
- Lender Fees
- Mortgage Broker Fees
- Selling Agent Commission
- Removal Company Fees
- Survey Fees
What report or survey should I choose?
There are broadly 3 types of survey you can get.
The first and cheapest option, the cost of which is sometimes completely covered by the lender is a mortgage valuation. This type of valuation is not meant for your benefit and is generally for the lenders use only. It is meant to notify the lender of any clear issues with the property that may effect its decision to lend. Importantly, in most cases, no surveyor owes you any duty of care as to the accuracy of this report.
The second, middle option is a Home Buyers Report. These surveys work on a traffic light survey to show the condition and state of repair of different parts of the property, for example, the roof, the walls, the windows, the electrics etc. This report would normally contain enough information for you to decide whether you’re comfortable proceeding with the purpose and would typically give you peace of mind that there are no major issues with the property.
Can I port my existing mortgage to a new home?
Most lenders will allow you to do this. But it will come down to the policy of your lender.
If you are allowed to do this, you’d typically transfer your existing balance to the new home. Any additional borrowing over and above your existing balance will typically need to be taken out on a new mortgage with the same lender.
A mortgage port will only normally work out cheaper where you’re on an interest rate lower than the current market rate, or your existing mortgage has early repayment charges that make it inefficient to move elsewhere and get a new mortgage.
A mortgage port is normally subject to a completely new application. Although the rate can be ported, the lender will review your financial circumstances from scratch.
How can a mortgage broker help?
Clearly there are a lot of things to think about throughout the home mover process, and that’s assuming nothing goes wrong.
A mortgage broker can help you get things right first time to avoid further delays caused by application declines, or issues with documentation or affordability.
Your home may be repossessed if you do not keep up with your mortgage payments.