Moving home mortgage help!

GBX_

Hi,

Long time stalker but not posted before. Could do with some opinions to help me form a decision.

I'm looking to move home from a 2bed to 3bed property due to a new addition to the family.

Unfortunately for me I've just remortgaged to a 2 year fixed rate (1.49%) which means without any overpayments I'm mortgage free in 19years.

The numbers...

We are looking at properties up to £350k and believe our current property is worth around £280k. Our current mortgage is £130k.

This leaves us with a £70k gap to fill. £30k we can cover with savings leaving us with a possible £40k deficit.

We've spoken to the lender who will lend us the money no problem. However we will have to pay the ERP to get out of our current deal likely to be several thousand pounds.

Now, am I best to just accept it was poor planning by me to enter into the fixed deal knowing moving was on th cards, or is there any other options increase my mortgage? Do I pay or stick out the 2 1 year 10 months in the fixed deal?

Thanks in advance for any advice

amnblog

Can you not take the current deal to the new property and top up on another rate.

Your intentions may have misunderstood by the contact as the lender, something we often see on this forum.

GBX_

Thanks for the reply. The mortgage is portable on the current rate yes, however only with the amount still owed.

The advisor told me if I wanted to port the mortgage to a new property and increase it, I would only be able to do so by taking out a new deal with the increased amount and incur the ERP on the current one.

I was sceptical hearing this...

amnblog

Sounds like the adviser did not explain the situation to you correctly.

When porting your date, if you do not borrow any less than currently the ERP is not payable at all.

Consult a mortgage broker.

GBX_

Hmm, not sure I follow 100% to be honest.

In essence this is what the lender is telling me.

A - mortgage can be ported but only up to the current mortgage amount. It can't be increased.

B - mortgages cannot simply be increased, I must take out a new mortgage covering the existing one plus the extra money I need. This incurs a ERP as I'm in a fixed rate.

Or have u misunderstood??

Cheers

haras_nosirrah

You have misunderstood.

I have moved house twice with the same lender and now have 3 different parts to my mortgage as each time I have taken the mortgage I had to the new house and borrowed additional money with the same lender at whatever rates were available for the top up. I have never paid an early repayment charge

E.g you owe 70k at 1.49% so take that to new house with no erc. The same lender will offer you the additional 40k at 1.89% so you now have 2 accounts on the same mortgage - original borrowing and additional when you moved

Obviously if you no longer meet criteria to get a mortgage with your current lender or they don't offer additional borrowing (e.g nram) then the above may not apply

Sounds like you need to speak to a broker

GBX_

Ah ok, that makes sense.

So my original mortgage stays as is. Just ported to the new property and an additional sum is then taken out on top of that at a different rate.

No worries. That's very helpful. Off to the brokers I go! Cheers.

minimike2

Sounds like it was the adviser at your lender who doesn't understand to me. Pretty straightforward to just top up with a new product for the extra money you need.

GBX_

minimike2 wrote: »

Sounds like it was the adviser at your lender who doesn't understand to me. Pretty straightforward to just top up with a new product for the extra money you need.

Indeed. The advisor was standing in for someone else. I don't think he was even a mortgage advisor to be honest. Cheers.

amnblog

GBX_ wrote: »

Indeed. The advisor was standing in for someone else. I don't think he was even a mortgage advisor to be honest. Cheers.

Regulation in action!

Lenders should be smarter than this. I certainly would not put an unregulated and inexperienced person on the phone to an existing client to discuss mortgage options.