Mortgage question

[ShelbyLimitedCo]

Hi all

Wondering if there are any mortgage experts on here... we do have an appointment with an advisor but wanted to get ahead of the game in terms of my expectations!!

So we are looking at moving area to my family (over 300 miles away) DH works remote for the moment and even when in the office will be 1 day a week maximum so he is not looking at changing jobs I on the other hand would have to leave my job.

We have a mortgage of £230,000 and wondered how this would work in terms of transferring it (if able?) to a new home if I was not working. I have no idea about mortgages and any help would be appreciated!!

We also have a help to buy loan if that makes a difference?

Any pearls of wisdom?

Gentle hump

*BUMP!!!!!!!!

You will need alto apply for a new mortgage

The mortgage is secured against the individual property (as in, a charge is put on the property so that you cannot sell it without them knowing). For that reason, mortgages are not portable from one property to another - you redeem the existing mortgage on selling house #1, and take out a new mortgage for house #2.

I would not leave my job until I had the new mortgage and house purchased. Otherwise you may not have sufficient income to borrow what you need.

@JenniferAllisonPhillipaSue that's not entirely true (or the wording of it at least) you can port a mortgage from one property to another, we did it, it wasn't redeemed we just had to take out an additional mortgage for the extra required as it was an upsize. Im assuming though if you port even without an additional mortgage you would have to go through all the credit checks etc as if it were a new mortgage to ensure the house could be tied to it? But you don't pay early redemption fees (unless you want to port less than the current mortgage value).

OP you will need to pay back HTB on the sale of your property, it'll be (assuming England) 20% of the sale price, you can't bring that with you.

@JenniferAllisonPhillipaSue sorry I see what you're saying it's me getting confused, technically behind the scenes it's scrubbing the old mortgage and creating a new one but has all the old terms so to the lendee it appears like the old mortgage. Ignore me!

OP you wouldn't be able to just transfer the mortgage, they would look at your income and reassess you both.

Use a mortgage calculator to see how much you can borrow! Most bank websites have one!

You are best to speak to your broker about the possible change in circumstances as different lenders might have different lending criteria.

With regards to your exciting mortgage if you move house that will be paid off and a new mortgage will be secured against the new property. You will also need to pay off the help to buy part of your loan with the proceeds from the sale!

If you are tired into a product, you can usually port that to the new mortgage, if you stay with the same mortgage company, and avoid paying back any early repayment charges. You would then borrow any extra funds needed on a new product, so effectively you would end up with 2 loans on different interest rates.

Yeah agree it looks like you get your income reassessed even if not borrowing more. Has this changed as we ported in 2015 and didn't have to go through checks

@user5656555 what you are saying isn't true in legal terms. Re porting a mortgage but that is simply an in house term which allows the benefits of the old mortgage terms to be transferred over to a portion of the new mortgage.

In legal terms the old mortgage is paid of and redeemed in full and removed from the selling property. An entirely new mortgage is taken out over the new property.

OP you need to work out affordability on the new house from your partners wages and the rough amount of equity you will have from the sale of the old property. Different lenders have different multiplyers for the major income earner and will take into account travel expenses if your partner will need to attend at the office 300 miles away once a week as well.

@redastherose yes corrected myself already...

I've been through the porting process twice recently and yes , even if you are not borrowing anymore you will still have to basically apply for the mortgage and provide pay slips and bank statements etc

Yes you can port but yes they reassess you. Including your age ( if you are 50’s?)

I asked this question of our provider recently. They said they would take my income from a formal job offer/contract. Didn't need to have three months payslips (otherwise how does anyone move!)
They would reassess income as if new mortgage. Would consider my husbands self employed business as in new area (ie having to establish new clients) although not sure how they would do this?
We haven't applied yet.

I think it's also important to consider nice just what you are likely to be able to borrow but also affordability. Deadly you shouldn't spend more than a third if your income on mortgage payments. I know people do but it's squeezes you for all the other costs of living.

Thanks all - we are mid 20s the area we would love to is significantly cheaper than where we are now so would be looking at about £70,000 cheaper than where we are now minimum

We have looked into renting until we get back on our feet up there but prices are still ridiculous!

@ShelbyLimitedCo hopefully the price difference will cover your help to buy payment? Have you checked a mortgage affordability calculator to see what you could afford on your partner's wage alone?

There shouldn't be a problem with porting the rate. The help to buy loan would need to be repaid when you sell your existing property.
Your new mortgage would be fully assessed again on the new terms and you would need to check with your lender of they would be willing to use income from your new job which you wouldn't have started yet. The lender I work for wouldn't so it would have to based on your partners income alone

Can someone please help explain to me what happens at the end of the first five years of having had the help to buy loan? I am finding it difficult to get my head around it. I have heard something like you cannot pay it all back at once? Can you pay back a chunk of it at that point to reduce the monthly repayments? Thanks in advance.

@Mumcube At the end of the five years you can either pay back the full amount of the help to buy, or half it, you can't pay back any other random lump sum.
Whatever you don't pay back, you'll pay interest on the loan instead and then pay it back when you can. Or you can remortgage the whole lot on to your existing mortgage.
Just be mindful though that if your house increases in value (which it probably will slightly after 5 years), then your help to buy loan also increases at the same percentage rate, but if your house devalues in price then you still have to pay back the original help to buy loan.
Hope that makes sense

Thank you 😊

Very clear thanks