Moving Home Mortgage Advice

Expert Guides

Moving home can be a daunting process. Aside from the cost of the property, there are other costs you will need to factor in when you are budgeting to move home, from mortgage costs and legal fees through to stamp duty and more. 

Whether you are searching for a new property or preparing to move into a new home for the first time, we will be able to assist you, and we have created a helpful guide outlining everything that you need to know about the cost of purchasing your new home. 

What’s the cost of moving home?

Stamp duty

Currently in England and Northern Ireland, you must pay Stamp Duty Land Tax (SDLT) if you buy a property or land that is over a certain price. For example, the current SDLT threshold for residential properties is £500,000 and the threshold for non-residential land and properties is £150,000.*

However, if you are a First Time Buyer, you will not need to pay any SDLT on purchasing a property under the value of £300,000.*

You will also pay the tax when you:

  • Buy a freehold property
  • Buy a property through a shared ownership scheme
  • Buy a new or existing leasehold

How much you pay will depend on whether it is land or property you are purchasing. To gain an idea of how much you will pay, you can use the HM Revenue and Customs’ Stamp Duty Land Tax calculator. 

*please note that this is subject to Government change.

Valuation fees

All mortgage lenders will assess the value of the property you are looking to purchasing in order to establish how much they are prepared to lend you. As a general rule of thumb, you should expect to pay anything from £150-£1,500, depending on the value of your property and the type of valuation that you choose to have conducted on the property.

If a structural survey is required then you will need to pay separately to have this done alongside the lender’s valuation, the lender will always need to do their own valuation even if you have your own carried out.

Some lenders will offer a free standard valuation on selected mortgage products but this is something you would have to discuss when sourcing the best lender and products available.

Legal fees

When purchasing any property, you must also take into account any legal fees such as your solicitor costs or licensed conveyor who will be responsible for completing all legal work involved in buying and selling your home. Prices range from £850-£1,500 and it is always worthwhile comparing solicitor quotes before committing to a vendor. You will also have to factor in costs for local searches which are between £250-£300 but most solicitors will include this within their total costs, so always check the quotes when you receive them.

Estate agent’s fee

Your estate agent will also expect to be paid a fee for the services they provide. This is usually 1% to 3% of the sale price plus 20% VAT.

Mortgage costs

This is important, as it is vital that you do not commit to a property that you cannot afford. With this in mind, you should use a Mortgage Affordability calculator to see how much you can afford to borrow and if it is sustainable. We can also provide you with an Agreement in Principle with a lender that will suit your needs and circumstances to ensure that you know what you are able to borrow. 

Maintenance and repairs

Finally, you should always factor in costs to repair your property if there are any problems. With the average repair bill for new homeowners being around £5,500, this should always be factored into your overall costs. There are lots of other moving home tips that can be really helpful with the entire process, so make sure that you do plenty of reading around before jumping in headfirst. You can find more information on our specialist moving home pages; alternatively, contact us today by ringing 03454 500200 to find out more or email hello@chartersfinancialservices.co.uk

If you’re planning on moving home, one of the key things you’ll need to think about is a mortgage for your new property. 

But what many people don’t realise is that, when you move, it is possible to transfer your existing mortgage with you. 

A process known as porting, this essentially involves applying for a new mortgage with your current lender with the same rates and conditions as your current mortgage. In other words, you are transferring your current mortgage deal onto your new property. 

Although many mortgages are portable, not all are, so it’s worth checking with your lender before considering this option. 

So, what’s the catch? Firstly, there are no guarantees that your lender will allow you to port your mortgage. And, if they do, the risk is secured against the new property, and it is likely they will want to review your financial circumstances. If, for example, your income has fallen or your credit score has dropped, the transfer may be denied. 

If you are looking into transferring a mortgage, we have created a helpful guide outlining everything that you need to know!

How does transferring a mortgage work?

If you’re considering transferring your mortgage, the first thing you will need to do is find out whether or not your loan is transferrable.  To do this, refer back to your original offer letter, or failing that, you can contact your lender directly to discuss your options. 

If you are eligible to transfer your mortgage, you can then apply for a mortgage which includes a credit check, along with a valuation of the new property you want to purchase and an in-depth assessment of your income. This is because, although the rate, terms and conditions of your mortgage may remain the same when you port it, it will technically be a new mortgage against a new property.

As it’s not the mortgage itself that moves, you will still need to apply for a mortgage on your new property. In effect, you’re reapplying for the same deal. 

Your lender will then review your application and decide whether or not you can still afford the mortgage. If your circumstances have changed since you took out the original mortgage, you may not be approved for the transfer. 

And it’s not just your financial circumstances that a lender will take into account. They will also consider your age, changes in employment, and the type of property you want to move to. All these factors will have a bearing on whether or not your application is accepted. 

They will also need to establish whether the level of risk will change when you move. If, for example, the property has a lower value and the loan to value increases, there will be more risk involved. 

The process of porting your mortgage varies from lender to lender, however it is typically relatively straightforward and no more complex than a standard mortgage application. 

You can transfer your mortgage to a cheaper property; however, lenders will only let you do this if you keep the same loan to property value (LTV) ratio. In order to keep the same LTV percentage, you may have to repay part of your original loan to the lender. This could incur an early repayment charge. 

Equally, if you wish to transfer your mortgage to a more expensive property, you will have to meet similar criteria for your loan to property value ratio.

Should I transfer my mortgage?

There’s both pros and cons to transferring your mortgage and it’s certainly not a decision you should take lightly. Ultimately, it comes down to whether or not it is a financially savvy decision based on your individual circumstances. Make sure you weigh up the advantages and disadvantages. 

A good starting point is to compare the fees and savings associated with your offers, including exit fees, valuation fees and early repayment charges. This should help you to make a final decision. 

The pros of transferring a mortgage

- If you are keeping the same terms with the same lender, you may not need to pay any mortgage exit fees or early repayment charges. 

- If your original mortgage is fixed on a lower interest rate, that rate will transfer over to the new property. 

- The mortgage application process may be shorter as you will have already provided much of the information to your lender (although they will need to confirm if any details have changed).

The cons of transferring a mortgage 

- By sticking with your current lender and terms, you risk potentially missing out on better deals elsewhere. It’s important to consider all the available deals and rates.

- When you port a mortgage, you will still have to pay certain fees and charges such as valuation fees, legal fees, and arrangement fees. 

- If you’re transferring your mortgage to a more expensive property, the additional money you borrow will probably be at a higher rate. This means you’ll have two different products at two different rates, with two different end dates. This can make re-mortgaging in the future more difficult. 

How long does it take to transfer a mortgage?

The amount of time it takes to transfer a mortgage will vary depending on a number of factors, including the type of property, whether the value of the property is changing, and if your lender approves the transfer. However, porting the mortgage will usually take anywhere between 14 days and 3 months. 

If you are unsure struggling and require assistance to help make a decision or you’re wanting to talk through your options, it’s always worthwhile speaking to the professionals. At Charters Financial Services, we’re on hand to offer the very best mortgage advice, please get in touch at 03454 500 200 or hello@chartersfinancialservices.co.uk

 

 

 

 

We started our enquiry not really knowing where we wanted to live or if indeed we were ready to buy our first house. I was passed through to Chawley, the mortgage consultant, and he was fantastic throughout. He took the time to explain things surely out of his remit and became someone I trusted quickly. Once we found our now home Chawley helped with the offer process and even some elements of the home buyers report. Cara helped at this point with insurance and updates, and was also great to work with. Throughout the entire process we felt like Chawley was the only person we worked with who took the time to really make sure we understood the lingo and the market. Thank you!

Becci

August 2020

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