How to Transfer Your Mortgage to Another Property
You can reap many financial benefits from transferring your mortgage to another property. For example, you could enjoy better terms, lower interest rates, and a more suitable home.
But how exactly do you do this? That’s what we’ll explore in this blog post. Read on to learn all about the process of transferring your mortgage to a new property. We will provide you with important information on how to navigate this journey with ease.
Key Mortgage Terms to Know
Before we explore the steps, you need to take to transfer your mortgage, let's clarify some important mortgage-related terms that you should be familiar with:
- Mortgage lender - The financial institution or bank that provides you with a mortgage loan.
- Existing mortgage - The mortgage you currently have on your current property.
- Mortgage deal or mortgage product - The specific terms of your mortgage, including the interest rate, repayment period, and other features.
- Mortgage porting - The process of transferring your existing mortgage to a new property.
- Mortgage approval - The formal agreement from your lender to provide you with a mortgage.
- Interest rate - The cost of borrowing money, usually a percentage of the loan amount.
- Fixed-rate mortgage - Your interest rate stays the same, making your monthly payments predictable.
Transferring Your Mortgage: Step-by-Step
Now you have a brief understanding of the key mortgage terms, let’s determine the key steps to take when transferring your mortgage.
Review Your Current Mortgage
Start by reviewing the terms of your existing mortgage. Be sure to take a close look at the interest rate, repayment period, and any penalties or early repayment charges. Understanding your current mortgage deal and mortgage rates will help you make an informed decision.
Discover Your Options
Contact your current mortgage lender to let them know you want to transfer your mortgage. They will provide you with information on porting, inform you of your mortgage terms and conditions, and any transfer fees or penalties that may apply.
Compare Mortgage Deals
Shop around and compare mortgage deals to secure the best possible deal when transferring your mortgage. Always check lending criteria first by reaching out to multiple mortgage brokers or using online mortgage comparison tools.
Consult a Mortgage Broker
Mortgage brokers access a wide range of lenders and products to find the most suitable deal for your new property. Brokers have access to a wide range of lenders and mortgage products. They'll guide you through the process to ensure you make an informed decision.
Get a Valuation
Next, get a valuation of your new property. This is necessary to determine your property’s current market value. Typically, your lender will arrange the valuation. The valuation is crucial in the mortgage application process.
Apply for a New Mortgage
Once you've selected your new mortgage deal and completed the property valuation, you can proceed with the mortgage application for your new property. Ensure that you have all the necessary documentation and information ready when you apply for a mortgage.
Mortgage Approval
Your lender will then review your new mortgage application. Once your application has been approved, you'll receive an offer, including details of the interest rate and other mortgage terms. Be sure to take your time to read and understand this offer before signing.
Notify Your Existing Mortgage Lender
Inform your current lender of your intent to transfer once the new mortgage is approved and ready to sign. They'll guide you through the next steps to complete the process.
Port Your Mortgage
Porting your mortgage involves transferring your existing mortgage deal, including its terms and conditions to your new property. Your current mortgage lender will coordinate with the new property's seller and lender to facilitate the transfer.
What if You Move to a More Expensive Property?
If you are transferring to a more expensive property, consider affordability – ensure you can handle higher payments. Likewise, you need to ensure that your current mortgage is portable.
If not, you may need to get pre-approved for a new loan. Consider your down payment; a larger one can lower your monthly payments. Be sure to factor in closing costs for the new property.
Considerations and Challenges
While transferring your mortgage can be a smooth process, it's important to be aware of some potential considerations and challenges:
Be prepared for potential fees associated with mortgage porting, including valuation fees and arrangement fees for your new mortgage.
Review your credit history and financial situation as they may be assessed during the process. Ensure to check your credit report beforehand; a low or inaccurate credit score/ credit rating could impact the outcome of your application.
Review your life insurance and business protection coverage to ensure they align with your new property and financial situation.
Consider releasing some of the significant equity in your current property to cover the costs associated with the transfer.
The interest rate on your new mortgage may differ from your current one, potentially leading to changes in your monthly mortgage payments.
We Are Here for All Your Conveyancing Needs
Having a conveyancer on hand can be extremely helpful throughout, assisting with mortgage terms, and paperwork, as well as liaising with the bank to ensure smooth legal proceedings.
At Bell Lamb & Joynson, we've been helping people with their conveyancing needs since 1821. We make buying/ selling property straightforward and stress-free.
Trust us to guide you through the entire process, handling the legal aspects and protecting your interests.
Our conveyancing experts will keep you informed every step of the way and offer cost-effective solutions. With us, your property transaction is hassle-free and quick. Bell Lamb & Joynson is your trusted partner, ensuring your property deal goes smoothly.
With our team of expert conveyancers and decades of experience, we're equipped to guide your mortgage transfer process. Contact us for assistance in making your transition smooth and successful.