There are several things that can happen to your mortgage. And it depends on a few factors.
Moving home is said to be one of the most stressful life events, followed closely by divorce. If you’re planning a move in the future, you will need to decide what to do with your mortgage.
Moving your mortgage to a new property is simple and allows you to keep your existing mortgage rate while remortgaging will allow you to shop around for a better rate. There are benefits to both, so you will need to think carefully about the best option for your needs.
When you move house, you have two options available to you:
The options available to you will depend on the type of mortgage you currently have, your mortgage rates and if you have early repayment charges due. If you aren’t sure of your options when moving house, speak to our mortgage brokers to find out if you are eligible to port your mortgage or if you will need to remortgage.
The easiest option when moving house is to take your mortgage with you. This will minimise the paperwork and allow you to keep your current mortgage rate, monthly repayments and mortgage term. If your new property is close in value to your existing property, this could be the simplest option, particularly if you have an excellent mortgage rate.
If you’re coming to the end of a fixed-term period, a better option might be to remortgage. This will allow you to lock in your mortgage interest at a fixed rate and avoid your lender’s standard variable rate.
Another option is to remortgage and choose a new lending product for your new property. Remortgaging works by taking out a new mortgage and using this to pay off your existing mortgage. Always check if you are subject to early repayment charges, as this could make remortgaging in the middle of a fixed-term more expensive.
If your new property is more expensive than your current property, you may need to increase your borrowing, while a cheaper property would allow you to release equity or take out a lower LTV. This may allow you to lower your monthly payments or shorten your mortgage term.
One of the biggest benefits of remortgaging is that you can shop around for the best possible deal. Working with a mortgage broker who understands your situation is one of the best ways to secure a good deal. They can also help you make sense of things like early repayment fees and arrangement fees, which can change the affordability of a remortgage product significantly. Get in touch with Niche Mortgage Info for expert advice on the remortgage process.