To Port or not to Port?

laticfanatic

I am in the process of getting divorced and selling my house. I currently have an Alliance & Leister fixed rate mortgage. I will be splitting the equity of around 80k with my ex.
I will have around 30k as a deposit and i am looking at new houses around the 130k mark.
The question I have if anyone can help me is : Should i just port mortgage and borrow 100k while using the 30k as a downpayment and also is this possible?
Or should I lend the full 130k on a fresh mortgage and use my 30k as a deposit?
I am very confused and didnt get a lot of assurance from A & E as it is all hypothetical until I apply. Any advice would be greatly appreciated. For info I have a child dependent who will be living with me.

holly_hobby

Firstly, so v sorry for the reason under pinning your house sale x

Moving to the question, porting relates to the product, fixed, discount etc, and NOT the underlying borrowings it applies to.

That means that when your house is sold, and if you see a new mortgage with A&L, they will perform status checks on the full amount of borrowing for your new home.

To which, if they permit the port of your current product, they will apply this to the an equal amount of your new mortgage that it applied to on your "old" mge at the time you redeemed (repaid) it, for its remaining term.

Anything you borrow in excess of this amount, will be placed on a product you choose from their current portfolio.

As an example, you have 100k currently on 2% fixed with 2 yrs remaining.

You effect a new mortgage with the lender for 130k.

Assuming you meet status checks, and they agree the port, 100k of your new 130k mge will be on a 2% fixed for the next 2 yrs, and the additional 30k you select a product from their current range.

If you port your deal, you will have 1 mortgage, divided into 2 sub accounts, given you'll have 2 diff products/rates going simultaneously for a period.

Some peeps try to match the term of their additonal product to match the remaining term of the ported deal, then when they both end seek an existing borrowing product for the entire os mge. (hope that makes sense).

Hope this helps

Holly xx

laticfanatic

First and foremost Holly Thank You very much for taking your time out to advise me. Much appreciated.
I suppose what I am trying to ask is that I will have 30k equity theoretically in my bank account and I am buying a house for 130k. Should I wipe the mortgage with A&E and go for a fresh mortgage or would porting be financially more sensible/beneficial?

Thrugelmir

A&L became part of Santander a while back. So any new mortgage facility will be granted by them. A&L no longer writes new business. Probably the reason behind the lack of assurance you received. The application will be considered on its merits.

holly_hobby

All depends on the current deal you have, if your have any early repayment charges (that may be avoided by remaining with them), what the top up rates on offer are, and what comparibles with other lenders are available.

I would suggest an hour or so with a whole of market mortgaeg broker, whom will evaluate your situation, and what the best route would be - additionally given your divorce you also need to re-visit your wills etc.

Hope this helps

Holly xx

laticfanatic

Thanks a lot. So the best bet is to see an independent mortgage broker? I will get the full picture then? I was looking to port for ease of process really. Thanks very much for your advice. A lot is happening very quickly, Thanks for taking the time x

kingstreet

FWIW if you have a joint mortgage at the moment, Santander will request the written agreement of the other borrower for you to port the rate from the old mortgage to a new sole mortgage for yourself.

laticfanatic

Thats an interesting point and something that wasn't mentioned to me either. I think the best bet would be to start a fresh mortgage using my equity as a deposit?

getmore4less

You need to do the numbers(as well as find out if porting is an option)

What's the current mortgage

Size, rate, follow on rate, fixed term, and most important the Early repayment penalty.

What deal can you get if you port, do you need extra borrowing what will that cost.

What is the best deal you can get mortgaging the property.

laticfanatic

Thanks again for the replies. I need to get my researching head on, I will basically have a £30k deposit for a property and will need to borrow a further £100k so there may be better deals out there than porting my current mortgage which could also prove tricky with the ex.
I am thinking that it may be better to sell and start again with a frersh mortgage. Any tips on latest deals would be appreciated, this is a minefield.