Porting + adding name + additional borrowing

raven6323

Hi,

I currently live with my partner in a flat which I own. We’d like to move in the next few years and buy somewhere together.

I’m in the process of remortgaging and I can’t decide between a two or three year fix. What I want to know is, whether it’s possible to port a mortgage, while adding a new name AND additional borrowing. If it is, a three year deal is a no brainer to me. 

My broker told me this is categorically not possible as it constitutes as a material change, but surely this must happen all the time!?

The alternative is go for the three year and pay the ERC (less than £1k) when we want to move or take out a two year and go onto a tracker with no ERCs once the initial deal is up. 

kingstreet

A new increased joint mortgage while porting the terms from an existing mortgage is possible with most lenders. You would need to check with yours as this isn't something every lender might choose to offer.

Hoenir

raven6323 said:

My broker told me this is categorically not possible as it constitutes as a material change, but surely this must happen all the time!?

Porting is entirely at the discretion of the lender. Covered by the subject to the lending criteria at the time condition.  No one can say what might be or might not be possible in 2 to 3 years time. 

amnblog

and the Lender is....

raven6323

amnblog said:

and the Lender is....

My current lender is Natwest and I'm looking to lock in a deal with Santander or Halifax as a back up before I receive my switch rates, but it was just a generic enquiry. My broker made it sound like no lender would be able to do this, which doesn't sound right? 

kingstreet

It isn't right. We have done a sole to joint port with a higher mortgage amount with NatWest in the last twelve months.

grumpy_codger

If the rate is lower than the current rates on offer, why would any lender even consider additional lending?

Hoenir

grumpy_codger said:

If the rate is lower than the current rates on offer, why would any lender even consider additional lending?

Additional lending would be at current rates. A separate loan account. 

amnblog

kingstreet said:

It isn't right. We have done a sole to joint port with a higher mortgage amount with NatWest in the last twelve months.

We are doing one now with Nat West. Port from single account holder, name added, top up on borrowing (to more than double).

The Broker you are dealing with unfortunately does not know his/her subject.

raven6323

amnblog said:

kingstreet said:

It isn't right. We have done a sole to joint port with a higher mortgage amount with NatWest in the last twelve months.

We are doing one now with Nat West. Port from single account holder, name added, top up on borrowing (to more than double).

The Broker you are dealing with unfortunately does not know his/her subject.

I'm starting to think that may well be the case...

I haven't signed anything yet, so I'm thinking I might just wait until Natwest offer me their switch rates in February and take it from there.

My current deal doesn't end until 30th June - if my switch rates aren't competitive, I take it four months would be enough time for me apply for a remortgage elsewhere? 

kingstreet

grumpy_codger said:

If the rate is lower than the current rates on offer, why would any lender even consider additional lending?

That's not how porting works.

The current mortgage is repaid from the sale proceeds of the current property. A new mortgage application is submitted, in this case in joint names for the new, higher amount needed. The terms from the existing mortgage are ported to the same amount of the existing mortgage as currently apply and any difference in the amount borrowed is offered on one of the lender's current new business products.

For example, a current £150,000 mortgage at 1.79%.

New mortgage application submitted for £200,000 and is offered with £150,000 at 1.79% and £50,000 at 4.49%. Typically, you try to tie together the expiry dates of the two tranches of borrowing so both can be dealt with at the same time in the future.