Porting Questions

djedga

So our adviser tells us we should be able to port the deal and extend the mortgage period to 25 years thus making the monthly payments close to what we were looking at with a brand new mortgage but without paying the fees...

Rollinghills

Sounds good, I don't see why not. You could extend your term at any point to 25 years subject to lender's criteria - before porting, when porting, after porting. The question of whether you can extend seems to be to be totally separate from the aspect of porting (I'm no expert though).

kingstreet

You aren't extending anything.

You apply for a new mortgage, of the amount and term you want. You port the rate from the old mortgage to the new one.

The old mortgage ends when it is repaid from the sale proceeds.

The fact the term of the old mortgage is x and the new one is y isn't particularly relevant.

If people stopped thinking a mortgage can be transferred from one property to another, explaining things would be a lot easier.

Port rate from mortgage to mortgage, not mortgage from property to property.

Rollinghills

kingstreet wrote: »

You aren't extending anything.

You apply for a new mortgage, of the amount and term you want. You port the rate from the old mortgage to the new one.

Port rate from mortgage to mortgage, not mortgage from property to property.

Is that right? I doubt it. Say you have a mortgage of 50k at 0.7% (from the good days). Now you need a mortgage of 100k. I doubt the rate of 0.7% would apply to the 50k of new lending which you seem to be suggesting.

I think you port the rate on the current balance of the mortgage, any additional lending is subject to current rates.

kingstreet

Read post #9, I'd already dealt with that.

We're now talking about the term of the new mortgage not the rate components within it.

An old Abbey/Santander flexible mortgage actually provides the increased borrowing at the previous rate, FWIW...

Rollinghills

Thanks, that's a good way of putting it, I read your latest comment in isolation

djedga

kingstreet wrote: »

You aren't extending anything.

You apply for a new mortgage, of the amount and term you want. You port the rate from the old mortgage to the new one.

The old mortgage ends when it is repaid from the sale proceeds.

The fact the term of the old mortgage is x and the new one is y isn't particularly relevant.

If people stopped thinking a mortgage can be transferred from one property to another, explaining things would be a lot easier.

Port rate from mortgage to mortgage, not mortgage from property to property.

Thanks - think I'm there now and understand, I'd got in a bit of a muddle over this last night!

On a side note I don't think it's explained very well by any of the banks. There are lots of questions that aren't really answered which makes the consumer (well me any way) panic.

My example using the same numbers:

Moving house
Borrowing additional funds to do so
Wanting to borrow the total over 25 years

Current mortgage over 17 years
93k remaining @2.65%

Apply for new mortgage of £180k over 25 years
Port 93k from old mortgage to new @2.65%
Additional 87k @1.89% (based on the LTV)

The two amounts together are then used to calculate the monthly payments over 25 years.

Try to get the two deals to synch up in order to combine at a later date onto one deal.

So all I have to worry about really is if I meet the lending criteria for the total amount of the new mortgage, which we should do.

kingstreet

djedga wrote: »

I don't think it's explained very well by any of the banks

Par for the course then?

Make it look/sound complicated so simple folk end up paying early repayment penalties they could have avoided.

If not that, simple incompetence, as they laid-off anyone capable of understanding it and explaining it seven years ago?

Apply for new mortgage of £180k over 25 years
Port 93k from old mortgage to new @2.65%
Additional 87k @1.89% (based on the LTV)

The two amounts together are then used to calculate the monthly payments over 25 years

Yep.

Try to get the two deals to sync up in order to combine at a later date onto one deal

You'll still have the two sub-accounts, but should be able to pick the same product for both.

So all I have to worry about really is if I meet the lending criteria for the total amount of the new mortgage, which we should do.

Yep. Porting has always been about satisfying affordability, criteria and loan to value to qualify for the new mortgage.

djedga

kingstreet wrote: »

simple folk

That about sums me up...

kingstreet

It wasn't intended as an insult/put-down.

I honestly believe those of us who profess to expertise in a particular area should aim to be able to deliver that knowledge to others in a fashion they can understand and which benefits them.

Otherwise, why should we bother and what would be the purpose of our existence?