moving and extending mortgage just before fix ends

pollyhelen

We are looking to move in the next few months and this will require extending our current mortgage. Our fix ends 31 august, and we have approx £96k to pay with a current property value of approx £170k. We are looking to spend another £50 on our next property (ie£220k) which is in our reach salary wise.

A few rookie questions

1. Is the convention to add to this mortgage to have one bigger mortgage rather than 2 smaller ones?
2. We will incur erc if we change providers before end august, so do we just need to extend with our current provider?
3. Should we then remortgage once our fix is up, by contacting a broker like we did in the first place? Will this be a big faff? Baby du first week Sept, so its not convenient to move in the autumn.

There will be more questions no doubt!
Thanks!

~Beanie~

pollyhelen wrote: »

We are looking to move in the next few months and this will require extending our current mortgage. Our fix ends 31 august, and we have approx £96k to pay with a current property value of approx £170k. We are looking to spend another £50 on our next property (ie£220k) which is in our reach salary wise.

A few rookie questions

1. Is the convention to add to this mortgage to have one bigger mortgage rather than 2 smaller ones?
2. We will incur erc if we change providers before end august, so do we just need to extend with our current provider?
3. Should we then remortgage once our fix is up, by contacting a broker like we did in the first place? Will this be a big faff? Baby du first week Sept, so its not convenient to move in the autumn.

There will be more questions no doubt!
Thanks!

1. You repay this mortgage when you sell your house and get a new (larger) one for your new house. You don't keep this mortgage and get another for the difference.
2. Yes, more than likely. You would have to check with your lender what the charge will be. You can't just extent with your current provider, you need a new mortgage.
3. You need a new mortgage when you move, not after.

Trying_to_be_good

You may be able to 'port' your current mortgage (so staying with the same lender) and have the additional borrowing on a new deal, or given the timing, they may be able to lend at their Standard Variable Rate and you re-mortgage the whole lot from September.

You'd need to ask your lender if your current mortgage is 'portable' and if so, what they would lend at what rate etc.

If you end up borrowing the extra on a deal that also includes an ERC, you'll end up out of sync for the two bits of your mortgage - possible, but normally inconvenient!

pollyhelen

I've just spotted elsewhere that porting means that we won't pay erc. If that's the case this is a bit more straightforward!

Thanks for responses so far! I'm starting to understand a bit more.