Porting and extra borrowing advise please

Simonb_2

Hi,

We have just sold our house and had an offer accepted on another house which is more expensive, here are the numbers:

current mortage = £122,000
sale price = £160,000
therefore £37,000 (equity after agents fee)

-New house price = £217,500
-Port existing over leaves £95,500
-We will use £33,000 of equity therefore leaves £62,500 extra mortgage needed
-We need £4,000 for fees and stamp duty.

I have to use my existing lender for the extra borrowing as we are tied in for 4 more years of a 5yr fixed rate.

My questions are:

1.Should the mortgage lender be charging another arrangement fee for this extra borrowing?

2.Do I need a broker to sort all of this money transfer out or does my solicitor do this?

3.Do I need a broker to port the mortage or can I do it myself? is it going to be straightforward??

Would appreciate any advise.

Thanks

AndrewSmith

Simonb wrote: »

My questions are:

1.Should the mortgage lender be charging another arrangement fee for this extra borrowing?

Depends on the product you choose. The extra borrowing will not be on the same rate as the ported mortgage but will have to be selected from the lender's current available range. If the rate you select carries any fees then they are payable.

2.Do I need a broker to sort all of this money transfer out or does my solicitor do this?

What do you mean by money transfer? When you port a mortgage all that is actually happening is that you are taking out a new mortgage but under the remaining terms of your existing product. It is exactly the same as any other purchase thus yes you need a solicitor.

3.Do I need a broker to port the mortage or can I do it myself? is it going to be straightforward??

Can be done either way, if you use a fees free broker you have nothing to lose by asking them to arrange it for you. You may also be able to get an exclusive broker only rate for the extra amount. Even if not it will still cost you no more and take away some of the hassle if you use a broker.

Nothing is ever guaranteed and even though porting yur application will still have to go through full underwriting and be accepted by the lender within their criteria. It is, again, no different in essense to applying for any other mortgage.

STOTTYCAKE_2

If you've been turned for extra borrowing, will the lender still let you move as it's a portable mortgage? Do you have to have credit checks again?

AndrewSmith

STOTTYCAKE wrote: »

If you've been turned for extra borrowing, will the lender still let you move as it's a portable mortgage? Do you have to have credit checks again?

Every time you port a mortgage you will have to go through underwriting as normal.

Remember it is not the mortgage you port but the remaining terms and conditions of the current agreement you have. It is basically a new mortgage but under the terms and conditioins of the existing loan.

Therefore, yes, full credit checks and usually referencing will be needed.

STOTTYCAKE_2

So I guess, there's no chance if turned down for extra mortgage and told to re-apply, that a provider would allow an application for a 'portable' mortgage. It's really a misrepresentation of 'portable' as they aren't portable at all except the rates apply and that's it. Not really made clear when taking out the mortgage as this wasn't explained when taking it out-provider quick to do the deal but didn't explain properly. Is there any case for appeal if turned down?

JoeK_3

STOTTYCAKE wrote: »

So I guess, there's no chance if turned down for extra mortgage and told to re-apply, that a provider would allow an application for a 'portable' mortgage. It's really a misrepresentation of 'portable' as they aren't portable at all except the rates apply and that's it. Not really made clear when taking out the mortgage as this wasn't explained when taking it out-provider quick to do the deal but didn't explain properly. Is there any case for appeal if turned down?

We have seen this type of feedback on post over and over again.

Mortgages are usually the biggest single financial outlay in peoples lives but yet some people don't turn to professional advisers when arranging their mortgages.

This is a classic case of "buyer beware" when going direct to lenders, not having the mortgages throroughly explained, only to find that it costs them thousands of pounds later down the line.

It looks like you are going to need the services of a good whole of market mortgage broker, firstly to unravel the existing mortgage technical details and then to maybe introduce you to another lender.

JoeK

AndrewSmith

STOTTYCAKE wrote: »

So I guess, there's no chance if turned down for extra mortgage and told to re-apply, that a provider would allow an application for a 'portable' mortgage. It's really a misrepresentation of 'portable' as they aren't portable at all except the rates apply and that's it. Not really made clear when taking out the mortgage as this wasn't explained when taking it out-provider quick to do the deal but didn't explain properly. Is there any case for appeal if turned down?

There is not really any case for appeal as they reserve the right to refuse or decline any application without reason. They are, after all is said and done, 'lending' you money.

MarkyMarkD

But Stotty's point about portability is well made.

Anyone who thinks that there is ANY chance that their acceptability to a lender may decline in future - say, someone who intends to go self-employed, or part-time, or whatever - and who thinks they might need/want to move house, should NOT take out a product with long-term penalties in the hope that they'll be able to port the mortgage in future.

If you are in any of the circumstances above, it's really better to choose a penalty-free mortgage and pay the slightly higher rate normally involved. This may also push you away from choosing a fixed rate as very few fixed rate mortgages are penalty free.