Mortgage porting

yellowlawn · 17 March 2017 at 2:56PM

I currently have a repayment mortgage and have got a new job in another county. Spoke to my provider who said I can transfer the mortgage but whether the next house is more or less than what I have currently. I have to go through, the suitability check.

The thing is when I move, the wife will be leaving her job to move with me. We have sat down and worked out our outgoings and what my incoming will be. We are left with a few hundred quid every month for food and other bits. With our house equity, we are clearing all our debts off.

If I'm the only one working and we have no debts after our house is sold, will this affect our chances of getting a mortgage.

The distance we are moving is nearly 2 hours away. So don't want to be commuting.

We have no dependencies to consider.

westv · 17 March 2017 at 7:27PM

I thought I read the rules said lenders weren't supposed to run affordability checks on those porting.

RADDERS · 17 March 2017 at 7:46PM

westv wrote: »

I thought I read the rules said lenders weren't supposed to run affordability checks on those porting.

It is a new mortgage, you are just porting the rate. They may not even agree to a new one as the property has to be suitable security and affordability will be checked.

glosoli · 17 March 2017 at 8:02PM

It is a conversation I have been having a lot recently,

Imagine if you were on the Standard Variable Rate, which generally is not portable, if you moved house it would just be a brand new product based on your current circumstances, fully subject to the same criteria as any other new application for anyone else. However sometimes there is an impression, that just because the rate is portable, and the existing mortgage has early repayment charges if redeemed early, that this is a "get out clause", of not having to go through affordability checks. Unfortunately it is something you need to consider when taking out a product with penalties, as you may have to move lender in order to move home and incur the early repayment charges.

First of all the mortgage adviser has to be in a position to make a recommendation to you, and then it has to pass affordability once credit scored. However, that being said, in my experience the mortgage adviser will try and assist where ever possible, and any underwriting concerned will take the facts into consideration.

yellowlawn · 18 March 2017 at 12:43AM

Does the old formula still apply of 2.5 times a joint salary and 3 times an individual when lending? Or is that out of the window now.

glosoli · 18 March 2017 at 12:49AM

Out of the window now, it is all about your net monthly incomes, and how much surplus you have remaining after expenditure, to service the mortgage repayment at higher rates of interest than are applicable today. That being said, it is not possible to borrow say more than 5x income, generally speaking.

westv · 18 March 2017 at 10:39AM

But did the FCA ever intend for ported mortgages to be included in "new mortgages" as regards affordability or are lenders ignoring the spirit of the rules in order to suit their own interests?

Edit: I see this says that those who took out mortgages prior to 2008 shouldn't be subject to checks if just porting

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11336328/Now-millions-face-mortgage-porting-woes-when-moving.html

kingstreet · 18 March 2017 at 10:43AM

westv wrote: »

But did the FCA ever intend for ported mortgages to be included in "new mortgages" as regards affordability or are lenders ignoring the spirit of the rules in order to suit their own interests?

Not ported no.

The October 2012 transitional rules were designed to help people who were mortgage prisoners to get new products so they weren't required to remain on SVR.

Porting a rate has always been subject to a new mortgage application being assessed and accepted by the lender for all the usual reasons, status, property/valuation and affordability.

No lender has ever given a guarantee it will agree to lend again nor is required to do so under regulation.

A lender may have agreed to lend the same amount again or less on a house move where the borrower is unable to demonstrate affordability but that was discretionary.

Frankly, it's moot anyway because the EMCD overturned the transitional rules in march last year.

amnblog · 19 March 2017 at 10:21AM

The porting feature is a concession, not a guarantee, to allow you to port the product.

You are never offered the option to port the mortgage which is distinct from the product.

You might have a dozen products over a twenty five year mortgage but only one mortgage.

Therefore a move to a new property will mean a NEW mortgage, but not necessarily a new product.

Mortgage porting

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