Advice needed - portable mortgage

karen810

For the first time ever, we recently used a financial adviser to advise us on a new mortgage. Our old fixed rate was coming to an end and we wanted to know what was best to do. We made it very clear that we were also likely to be moving house this year. They recommended a flexible offset mortgage with Scottish Widows and it was all set up (reasonably painlessly) and we were assured that it was portable.

We recently contacted the financial advisers again to let them know that our house is on the market and to ask for a step by step guide to porting the mortgage to a new property. There was lots of teeth sucking and they told us that the process involves a complete new application and that we aren't guaranteed to be offered the mortgage on a different property.

Our mortgage is only for 56% of the property value and we don't want to borrow any more. Our circumstances haven't changed since the last application (less than six months ago) but we feel like we've got to jump through hoops now to get the application underway. There is also a £3500 penalty if we pay off the mortgage in the next 2 years so if we have to go to another lender we will incur this charge.

We feel now that we can't trust the financial advice we're being given and probably shouldn't have been advised to swap mortgages in the first place. Should we go direct to our mortgage company to apply for the move and completely cut out the middle man (financial advisers)? Also, do we have any recourse to the financial advisers if we do incur a penalty?

We may be worrying over nothing but we feel let down and not sure where to turn.

kingstreet

Portability is the option to move the rate from an old mortgage to a new one with the same lender when you move home.

The lender still carries out the usual checks as these are required by the regulator.

Many people think portability is the right to move a mortgage from one property to another. It isn't. The mortgage is repaid on sale. There is no guarantee that your lender will lend to you again if its criteria, or your circumstances change.

amnblog

You have not applied to port the mortgage and no-one has said no yet have they?

If you are moving house your new mortgage will have to be underwritten whether you are porting a product or going to a new lender.

If you believe your previous application means taking the mortgage to a new property is a formality, you have misunderstood.

On no account go direct.

karen810

Thanks for the quick replies. No, no-one has refused us yet. We haven't yet found a property to buy so the process hasn't started. I think we knew that there would be some checks made when we moved...the mortgage would be on a different property for a start and we would expect them to check that....but the process seems to be a lot more in-depth than we expected and we weren't told this would be the case when we took the mortgage out. Maybe a bit of naivety on our part but the financial advisers knew that we were planning on moving and didn't explain that we weren't guaranteed to be able to move it. When we expressed concerns about the early repayment penalty, they said "well it's only three and a half thousand" as if this isn't a lot of money!

dimbo61

Since you took out the mortgage new rules have been introtuced called MMR.
So they will check everything that goes in and out of your household.
Income, spending, childcare, car costs, nights out, holidays etc EVERYTHING.
They have often reduced the amount they will lend

karen810

Thanks dimbo61. They alluded to the fact that something had changed since we took the original mortgage out but didn't specifically mention MMR - I'll look into that.

Amnblog - if you are still checking this thread - could you please expand on why you don't recommend us to go direct? Will it look as if our advisers have advised us against the mortgage if we suddenly go direct? I think we've pretty much straightened things out with them and will use them anyway but we wanted to keep our options open.