Porting mortgage and LTV - help and advice please!

[Motheroftwofeline]

Hi all

I know I need to speak to my building society but I get a little daunted on these matters so a little friendly advice first will help build my confidence a bit.

Two main questions;

1. We are looking to relocate and have found a property which is worth almost exactly what we expect to sell our current home for. So we are looking to transfer our mortgage across. We are in a fixed rate so can’t repay it without fees. We are currently in 80-85% LTV bracket but have some savings we can use to bring us down to the 75-80% bracket. We are allowed to repay up to 10% without break fees so this would be possible. I see online the rate is cheaper for the second but if we are porting, will they let us change the rate or not? What about the break costs? We are on a reasonably good rate of 2.1% already which is cheaper than what they are currently offering in the 80-85% bracket. Could they force us onto the higher rate? I’m a little confused about what’s best to do

2. DH was late with a payment on his credit card 3 months ago (I know, I’m mad about this too and he now has a DD set up) and am terrified this is going to scupper our credit score. How much of an impact will this have if we are borrowing the same (or less)? We have 5 years of perfect repayment history and pass the affordability calculator by quite a long way. Could they still say no and we be trapped; or am I being paranoid?

I feel so anxious about all things mortgages even though we don’t need to borrow anymore.

Grateful for any help or advice. Many thanks

Your loan-to-value was set when you took out the mortgage - you can't change it mid-way through just because you're porting (in the same way that you wouldn't be able to change it mid-mortgage if you were staying put). So your interest rate will stay the same, whether you overpay or not. The rates that the building society is currently offering would only be relevant to you if you were borrowing more than your current mortgage (in which case you'd have a new product running alongside the one you're porting) - or if you were paying it off (including the early repayment charge) and replacing it altogether.

Can't imagine that one little blip on your DH's credit record will be a problem though.

Can only comment on point 1 as we recently ported our mortgage. You take the existing rate with you to the new purchase until the end of the term. You won't be eligible for the lower rate at this stage unfortunately.

As PowerslidePanda says!.
We ported and then borrowed more. Had 2 different mortgages running at the same time.

If you’re porting our mortgage and not borrowing more the only worry is the valuation on the new property. If that’s ok then it is straightforward.

Thanks very much all! Not much merit in overpaying then, not until the next fixed rate ends at least.

Feeling reassured and nearly brave enough to make that call

Please feel brave enough to give them a ring! I work in mortgages for a high street BS and we're such a friendly bunch- our job is literally to help you figure out these worries and we can just have a chat with you and explain fully how it all works so you feel prepared going forward!

In brief though- porting means keeping your product so your 2/5/10yr fix rate etc- that moves to the new home with you and because you're not leaving the deal early, you'll have no early repayment fees. The lender may offer lower rates but to move onto that rate you'd be leaving your deal and have to pay the fee. (At my workplace we have to give you advice rather than you going online so we will talk you through whether it would be cost effective to pay an exit fee or not anyway)

In regards to your parters missed payment, one missed payment is unlikely to make enough of a dent to affect your creditworthiness as you're an existing borrower. Again at my workplace we do a soft credit check to see about this (so if you fail it it won't harm your credit file further as it doesn't leave a footprint) and if you did fail it, as an existing borrower we have an appeals process you'd fit into so there's ways around a bad credit score.

Hope this helps, but please pick up the phone and they will help you out :)

I find that a lot banks will allow you to port only if you are borrowing more not less. Check your mortgage illustration and see what it says.

1. They won't let you change the rate without paying the ERC.

We recently did this but the house we were buying cost more so we ported our current mortgage on the same conditions. We then had to take out another mortgage to cover the difference. Because the original mortgage fixed rate was about to expire, we took the 2nd one on the SVR with a view to switching to a fix to match both mortgages on the same product and timescale. This meant that before the switch, we had unlimited levels of overpaying on the 2nd mortgage.

2. It will have an impact as it is quite recent but I don't know as to what level this will be. You will have to check with your bank on this one I'm afraid. Or if you are willing to pay the ERC, then it a mortgage advisor can look at others banks that might accept you.