Porting our mortgage - seems easy, have I missed something?

fannyanna

Now I know that I will eventually need to speak to my lender or an IFA but for now can anyone highlight any potential pitfalls in our ability to port our mortgage?

We got our first mortgage in 2007. It was a 95% LTV mortgage on a property bought for £114,950.

Our mortgage balance is around £105,000 and realistically we'll sell our property for £100,000.

We've seen a property on the market for £110,000.

We will have funds available to cover the negative equity from selling our current property, the additional money needed for the larger property and the costs assicated with buying and selling.

Our circumstances have vastly improved since we got our mortgage (joint salaries increased by quite a bit and debts paid off).

We were only tied in for 2 years so we have no ERC to pay.

Now it seems to me that we should easily be able to port out mortgage. Am I correct or have I missed something vital?

holly_hobby

The product will need to be portable (check you mortgage t&cs).

In general, portability works by the lender allowing you, if you pass all status and affordability checks, to port the remaining level of borrowing held under the said mortgage rate (subject to LTV), to your new property. Any additional lending may be placed on a product from their current range.

Contact your lender for specific details.

Hope this helps

Holly

opinions4u

You need to meet the current criteria of the lender. This includes affordability and deposit size. Most lenders restrict you to 90% LTV and many less than this.

Talk to the lender.

Evilm

Be aware that the affordability calculations have changed extensively since you took out the mortgage. That may mean that you don't qualify for the same amount again.

getmore4less

Debt gone , income increased so even though the criteria have tightened you may be OK on income multiples.

Biggest issue will be LTV on the new place.

Your lenders new LTV limits might mean you need to find a bit more money.

Depends what you can knock the new place down to and what you realy get for yours.

What rate is the loan?

fannyanna

Thank you for your responses.

We definately do have a portable mortgage - double checked the T's & C's a few months ago.

Our joint income has increased by roughly £15,000 a year since we first got our mortgage. In addition when we got the mortgage we both had an unsecured loan each. Both of these have been paid off and other than the mortgage we are debt free. I feel quite confident that affordability will not be an issue.

With regards to the LTV at the time we only needed a 5% deposit. Will this still be the case or are they likely to require a bigger deposit as I appreciate gone are the days of 95% LTV mortgages?

I know I still need to speak to the lender but I thought you wise bunch may have a very good idea of the answers to my questions.

kingstreet

Porting is only useful to those who have a current mortgage rate which can't be bettered. To be able to port the rate, you still have to satisfy all the lender's requirements and criteria, including any changes to the required level of deposit since your last application.

Portability does not give a guarantee of a new mortgage or confer any reduced status options.

fannyanna

kingstreet wrote: »

Porting is only useful to those who have a current mortgage rate which can't be bettered.

Yep that's us. We're tracking 1.99% over the base rate and wouldn't find a deal like that with our level of deposit.

kingstreet wrote: »

To be able to port the rate, you still have to satisfy all the lender's requirements and criteria, including any changes to the required level of deposit since your last application.

I think the deposit will be our stumbling block.

I've called our lender and am waiting for them to call me back to discuss their criteria.

kingstreet

Fingers crossed then!