What does HomeMover mean?
A HomeMover is someone who already has a mortgage on a property but wishes to move to a new home. They may want to ‘Port’ the mortgage and remain on the same deal or renegotiate.
Even if your mortgage is portable, you will still need to go through the process of researching the available mortgage deals. There will be fees to pay, and you might be refused if your circumstances have changed significantly.
What is Porting?
When you Port your mortgage, you continue to use your current mortgage arrangement for a new property. This option is not always available, and you will have to check your initial agreement to find out.
When you Port your mortgage, you will have to go through the same credit and affordability check when you first arrange it. There will also be fees for Valuation, Legal, and Stamp Duty. You may have the chance to renegotiate your current arrangement.
Remortgaging with an existing lender?
There are pros and cons to remortgaging with your existing lender, especially if you need to increase your loan amount. On the one hand, it’s simple to Port your mortgage, but you could end up with two mortgages if you need to increase the loan. Your existing lender might require that you take out a second mortgage to cover the difference.
If you switch to a new deal, you will also have to pay an early settlement fee even with the same provider.
Remortgaging with a new lender?
The alternative is to remortgage with a different lender. This, too, has pros and cons. You can use the new loan to pay off your existing loan and consolidate debts or sell your home. This might be a good idea if house prices have risen in your area.
If you move to a new lender, you have the opportunity of switching to a new arrangement with different terms; however, you may still have to pay an exit fee to your previous lender as well as other fees.
Think carefully before securing your debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
How is your mortgage affected by property value?
Your HomeMover mortgage will be affected by the property’s value: Is it cheaper? More expensive? Does it have negative equity? If more expensive, you will have to prove to any lender that you are financially viable.
If you choose to move to a smaller home, your monthly premium will reduce; you may even be able to buy the property outright. If your home has fallen into negative equity, it means it has dropped in value – you will struggle to remortgage in this scenario.
Can a Mortgage Broker help you find the right deal?
Due to the number of providers and options available, coupled with your unique situation, it can be difficult to find the most appropriate mortgage arrangement. You might have an idea of what is right for you, but an expert opinion is also recommended. By consulting a whole-of-market Mortgage Broker, you will have access to all the country providers, which can help you identify the most suitable option.