Your home may be repossessed if you do not keep up repayments on your mortgage.
There are multiple reasons why people move home and sometimes it is because they have outgrown their current home, had a new addition to the family, are looking for a better catchment area for the children’s schooling, a career move or they simply want to be somewhere else.
Some may argue that when you are looking for a new home as a “Home Mover” the process should be simpler because you have done it all before. However, there is still a huge amount to take into consideration, not only from the perspective of finding the right home, but also what to do with your mortgage facility. Pay it off, take your mortgage with you, or, let out your property?
Paying it off
Generally, a home move will necessitate a difference in what you currently owe by way of mortgage and what you need to consider to facilitate the onward purchase. Therefore, paying off the mortgage on the house you are selling and taking on a new mortgage on the one you are buying is one way of dealing with the transaction.
Whilst this presents an opportunity to look around for a better mortgage deal you need to satisfy yourself that there are no penalties associated with your existing home loan. You may find that there are fees and additional interest charges if you’re still in the special offer period of the loan, or, on a fixed or discounted deal rather than the lender’s standard variable rate.
Take it with you?
Most mortgages these days are portable, meaning that you can transfer them from the property that you originally borrowed against, to the home to which you want to move.
Do you know? There may be fees to pay for the transfer and a few hundred pounds is typical to port a mortgage to a new property. Just another cost to be taken into consideration when deciding upon an appropriate course of action.
Let out your existing property?
Let to Buy may be an option that is open to you and If you are struggling to sell your home or your property has dropped in value, this is something you may want to consider. Letting out your property could allow you to move into a new home without feeling pressure to sell in a rush, potentially at a loss, and may also provide you with the income stream to ease the financial burden.
This option, in particular, is a bit of a mine field as most lenders willing to accept this scenario will do so with a list of restrictions. Whatever you decide to do, professional advice is essential.