Second Time Buyer and Baffled

SE9Gull

Hi. Have done some searches but not exactly sure what to search for so apologies if this topic has been done to death - if so, please point me in the correct direction.

We bought our first house in April 2007 on a 100% mortgage of 245k from Scottish Widows and have paid out accordingly each month since then with no dramas. Luckily due to the area we live in, there has been no discernible dip in prices since the recession and in fact a smaller house down the road has just gone up for 269k.

We want to relocate to a different part of the country to a house that is worth approx 244k. How do we go about this? I was under the misapprehension that I could just port the mortgage over to the new place but I have been told that this is not correct.

Our financial situation has changed to the extent that both my wife and I are now approx on 10k more before tax than we were at the time of the mortgage application back in 2007, plus we have another child.

Thankyou for reading this far, and doubly thanks if you point me in the direction of what I need to do next.

Cheers.

Thrugelmir

SE9Gull wrote: »

I was under the misapprehension that I could just port the mortgage over to the new place but I have been told that this is not correct.

You are attempting to port the product not the mortgage. In that the existing interest rate you are on will be applied to the new mortgage.

The new mortgage will be subject to current lending and underwriting criteria. A lot has changed since 2007. The non-existant availability of 100% mortgages being one.

kingstreet

If your current rate is portable it will be mentioned on the KFI and on the offer from when you took it out. Portability is the ability to transfer the rate from one mortgage to another when you move house.

In practical terms, you have to approach your lender for a new mortgage on the new property and satisfy their current criteria and status requirements. The old mortgage is repaid and a new one starts. In the current climate, a deposit will almost certainly be required, either from savings or from the equity in your current home.

If you are borrowing less, a partial repayment charge will be likely. If you are borrowing more, the extra money will be on a choice of the lender's current products, with the current rate ported to the existing amount you owe for the remaining time.

As Thrugelmir says, it is not a guarantee of a mortgage, merely the opportunity to see out the original offer.