One common dilemma faced by homeowners planning a move is whether to carry their existing mortgage deal to their new home without losing its terms.
This process, known as “mortgage porting,” offers several advantages for homeowners in Newcastle.
Advantages of Porting Your Mortgage in Newcastle
Porting your mortgage in Newcastle allows you to maintain the same interest rates and terms of your original mortgage deal. This can be particularly beneficial if your current mortgage has favourable terms that you do not want to lose.
By porting, you avoid the need to renegotiate new mortgage terms, potentially saving you time and money during the moving home process.
The Porting Process
The key aspect of porting your mortgage involves repaying your current mortgage using the proceeds from the sale of your home and then continuing the mortgage on the same terms for your new home.
This means that you can transfer your existing mortgage deal, including the interest rate and terms, to the new property without having to renegotiate a new mortgage from scratch.
This process can be straightforward, but there are important factors to consider. You will need to coordinate the timing of your home sale and purchase to ensure a smooth transition. Additionally, you must ensure that the new property meets the lender’s criteria for the existing mortgage terms to remain valid.
Considerations and Limitations
The possibility of porting your mortgage in Newcastle depends on the terms set by your lender. Some mortgages are portable, allowing for this transfer, while others are not. It’s crucial to check your mortgage agreement or speak with your lender to understand if your current mortgage can be ported
Even with a portable mortgage, you will need to reapply and undergo a new round of affordability checks and credit searches. This reapplication process assesses whether your financial situation has changed since your original application.
Changes such as a decrease in income, increased debt, or a lower credit score could affect the lender’s decision to approve the porting request. Additionally, the new property must meet the lender’s valuation and condition criteria, which might also impact the approval process.
Understanding these considerations can help you prepare and increase the likelihood of a successful mortgage porting experience.
Different Porting Scenarios in Newcastle
Porting to a More Expensive Property in Newcastle
When moving home in Newcastle, if your new property is more expensive, you can use any equity accumulated in your current home and savings as a deposit.
If the required mortgage balance exceeds your current mortgage, you may need to take out a larger mortgage. However, be aware that this could involve taking an additional mortgage deal, potentially at a higher interest rate.
Porting to a Cheaper Property in Newcastle
If you are moving to a cheaper home, you can port your deal by repaying some of your debt to the mortgage lender.
This can help you avoid early repayment charges (ERCs) and maintain your current mortgage terms.
Restrictions on Better Interest Rates
Porting your mortgage in Newcastle might limit your ability to shop around for better interest rates. In some cases, switching mortgage lenders might be more beneficial if you can secure significantly lower rates elsewhere.
If porting is not an option, consider postponing your move until your current mortgage deal ends to avoid ERCs.
Expert Mortgage Advice on Porting
We always recommend speaking with a mortgage broker in Newcastle to discuss your options before deciding whether porting is suitable for your situation. In some scenarios, other options may benefit you more financially.
When moving home in Newcastle, you need to arrange the sale of your current property and a mortgage for your new home – let us take the stress away and offer a helping hand!
Date Last Edited: July 8, 2024
