What Is Mortgage Porting?
| Free Mortgage Broker | |||
 | |||
| TRUSTED MORTGAGE BROKER | |||
|
Your Guide to Mortgage Porting
Many homeowners with mortgage upgrade themselves to bigger property or downgrade to smaller property as per the needs. But if a current home has a mortgage on it then there are couple of options available to homeowner.
One of the common options is port your mortgage to new property. Let us look at the how porting of mortgage works and what are the advantages and disadvantages of mortgage porting.
What is Mortgage Porting?
Mortgage porting is you move your current mortgage to your new home. The current mortgage terms and condition will remain the same through out the fixed term of your mortgage. Not all the mortgages are portable, or it can depend on couple of factors.
How to Transfer My Mortgage to New Home?
Not all the mortgages are portable which means you can’t transfer the mortgage to new property. In that case you will need to apply for new mortgage. But if your Mortgage is portable then you will need to make an application to lender which involve full affordability and credit check which ensure the mortgage remain affordable. Porting mortgage application is same as normal mortgage application.
What Could Stop You from Porting Your Mortgage?
While applying to port your mortgage to new one is not a very complicated thing but some of the factor’s mention could stop you from porting your mortgage.
Property
The type of property you are buying plays a main role. Lenders are not happy to lend on all the properties. The type of property, location of the property and condition of the property could affect the decision of lending.
Income Affordability
Since the original mortgage started if the income has change or the lender criteria changes it may be seen difficult to get mortgage approval. Even change in employment like form employed to self employed may affect the lending form lender.
Mortgage Condition
While most of the mortgages are portable to new property but some mortgage may have a condition attached which means they cant be port to the new property.
What Are The Benefit of Porting Mortgage?
Can Keep the Interest Rate.
One of the advantages of porting mortgage is if you have a better rate which can be taken to new property while porting. While using the lower interest rate means it could save money on mortgage payments.
Saving on Early Repayment Charges.
If your current mortgage is a fixed term, then lender will charge you early repayment charges for breaking the mortgage early while you take the new mortgage for new property. But porting your mortgage could save you from paying the early repayment charges. While lender allow you to take mortgage to new property and wave off early repayment charges
What are Disadvantages of Porting Mortgage?
Missing Out on Better Rates.
While porting allows you to save on early repayment charges, but you could be missing on better mortgage rates with other lenders may have. Many lenders will offer better rates and deals to new customer.
Two Mortgage Parts
If someone buying expensive property and porting the mortgage, then they will have two parts of mortgage at two different rates and at two different dates. This will make very difficult if you want to remortgage to new lender without paying early repayment charges.
Can I Borrow more When I Port My Mortgage?
Yes, you can borrow more if you are buying more expensive property than your previous property. Your new mortgage rate could be different to previous rate, and you will have two parts of mortgage at two different rates and two different end date.
For example, if previous mortgage is £100,000 and new property requires mortgage of £150,000 then port mortgage of £100,000 will have different rate and end date. Additional mortgage of £50000 will have different rate and end date.
Can I Borrow Less When I Port the Mortgage?
Yes, you can borrow less if you are downsizing your property or if you have more money save for deposit. The only downsize of borrowing less is you could be liable for early repayment charge on the reduce amount you are not borrowing. Technically you are paying off that amount early which may trigger ERC.
For example, your previous mortgage is £100000, and you want buy property of £90000. Your deposit is £20000 and want to port only £70000. You will pay early repayment charge on £20000 as your bank may allow to pay 10% overpayment in a year.
What if you can’t Port Your Mortgage?
If you can not port your mortgage to new property, then you could get a new mortgage on new property. Saying that you may have to pay early repayment charges if you are selling that property. Usually early repayment charges are in % of the loan outstanding. Always check the mortgage offer to know your early repayment charges.
But if you are not selling the property then you could ask your lender for permission to let, called consent to let.
Which Mortgage Lender Allow Porting of Mortgage?
Most of the Highstreet bank and building society will allow you to port the mortgage. Some of the subprime lenders may have a restriction of porting your mortgage.
What is Mortgage Porting Process?
Mortgage porting can be very easy and straight forward process if done right first time with the help of no fee independent mortgage broker. Many mortgage borrowers ask how long does a mortgage application take through mortgage broker?
Initial Assessment
Look at your finances the property you want to buy and deposit you will have. Go through mortgage offer which will explain if the current mortgage is portable or not.
Make sure the income and credit rating has not gone down. Talk to local mortgage broker they will go through your case and advice your best suitable options for you.
Talk to Your Bank.
If you are going ahead with mortgage porting, then let your lender know that you wish to port your mortgage. They can go through with you the terms of the current mortgage. Involving a mortgage broker could make things a lot easier for you. As your broker can talk to your lender and prepare you with list of paperwork you may need.
Complete the Process.
If you are porting with help of mortgage broker, then they will complete the mortgage application to your bank or building society. Your lender will do the income assessment and instruct the property survey. If they are happy with the outcome, then your mortgage offer is issued.
Working with a fee free mortgage broker near you will ease a lot of stress while you are porting your mortgage.
Some of the FAQ.
Porting Mortgage is the Best Option?
If you should port your mortgage or not it will depend on several factors that are unique to your circumstances. Taking advice from independent mortgage advisor will help you to decide what is the best option for you.
How Easy is the Mortgage Porting?
Mortgage porting and new mortgage application are similar process. Both application process can be confusing and difficult with out a help of good mortgage broker. Look for Fee Free Mortgage Broker who could make mortgage porting a smooth and easy.
Lenders do Full Income Assessment When Port?
Yes, your lender will run full income assessment on your application to port the mortgage. Lenders need to be sure that you could afford the new mortgage you are going for.
Mortgage Porting and Remortgaging are same?
No, it is completely different. Mortgage porting is transferring your mortgage from one property to other and remortgage is changing your mortgage product at the end of your fixed term.
Always speak to a Free online mortgage broker for your porting question you may have. Our FCA approved independent mortgage brokers can guide you with your mortgage porting.
Some of the lenders porting guides
Compare Best Remortgage Rates
Mortgage porting with HSBC
Mortgage porting with Halifax.
Mortgage porting with Barclays.
Mortgage porting with NatWest.
Mortgage porting with Santander.
Mortgage Porting with Nationwide.
