Moving house when you are a homeowner involves a little bit of work and if it is your first time, the
process can seem a little overwhelming.

Even if it’s not your first time, some expert advice can turn a stressful few months into a relaxed breeze – so why not turn to the experience of The Mortgage Hut and follow our comprehensive guide to moving home.

Porting the mortgage – moving your mortgage with you

The first assumption that many potential movers make is that they are going to have to close off
their old mortgage and go through the entire mortgage application process again just like they did
the first time (only, sadly, with more stamp duty to pay).

While that’s certainly an option (and a sensible one for many people), it’s not the only one. Your
current mortgage may well be portable, meaning you can move home with it. Sound confusing? Let’s
clear the fog!

A mortgage is a secured loan – you owe the lender the money and have agreed that if you fail to
repay them, they can use repossess your house and sell it to recover their losses. Although you took
out your mortgage on your current property, there’s really no difference to your lender if it is
secured on another instead – and thus the mortgage can move over and be tied to your new home.

Of course, there are some conditions of this.

An acceptable property

Your mortgage provider would have to be happy that the new property is capable of securing the
debt which means you could be limited in where you can move to. In most cases, this isn’t really a
factor as the majority of people move into a standard home, but if you are looking to be a little more
adventurous in your property type then you could run into a problem.

Properties that may not be acceptable to your provider include:

  • Homes made from a non-standard building material – this means you can’t port your mortgage to a cob house in a communal build, a static caravan or even (in some cases) a cottage with a thatched roof.
  • Flats above a commercial premise – you might think living above a shop has it advantages (like instant takeaway!) but your mortgage provider is unlikely to agree. There are many issues which are outside your control, such as security problems or noise pollution that make the property difficult to sell on.
  • High-rise flats – lenders have a concern that high-rise properties lose value and are unlikely to want you to port your mortgage to a flat above the fourth floor. Issues with communal areas (such as lifts and stairs) also make these properties less than appealing.
  • Homes with an annexe – the idea that your ageing parents can live with you and yet stay separate can be enticing, but the lender will see the fact that you may be tempted to rent out the annexe and break the terms of your mortgage as a consequence. Short lease leasehold properties – a lease that is 80 years or less can be difficult to renew and the property value will drop, a situation lenders find undesirable.
  • Live / work units – you would be outside of the terms of a residential mortgage if you had a home that was also a business, so avoid offices with attached flats.
At The Mortgage Hut we can help you acquire a new mortgage for any of these more unusual
properties, but we can’t change the terms of your existing mortgage, so it may lock out portability if
you intend to move to a non-standard home and getting a new mortgage is the only option.

Reassessment of your affordability

The lender will run a new round of affordability checks and you may find that your current financial position is not quite as strong as it was when you first obtained the mortgage. This is especially true if you are looking to up the size of your mortgage to cover the value of the new home.

Even if your mortgage lender still considers you a viable option for the mortgage, deals and terms may have changed in the interim, and you could find yourself on a different rate of interest than you are currently.

All in all, though the mortgage port might seem easier (especially as it will come with fewer fees), it may end up being a more expensive option. Talking to our experts at The Mortgage Hut will help as we can breakdown the deals on offer and make a complete comparison for a better overall picture.

Porting the mortgage – quick questions

Q: Is porting the mortgage the cheapest option?


A: In the short term it may be. You will not be charged any early repayment fees (which can be considerable) and some other fees will be smaller, but a lot will depend on the deal you are offered and its interest rate. It could be short term gain but a significant long term loss.

Q: How is the mortgage port calculated?

A: For all intents and purposes, the port works mathematically the same way getting a new mortgage and paying off the old one does. For a simple example, if your current home value is £150,000 and your mortgage balance is £100,000 and you are looking to buy a property at £180,000 then you will need to increase your ported mortgage by £30,000.

Q: Could a ported mortgage end up as a better deal than it is currently?

A: Yes. Your LTV (loan-to-value) rate may work out smaller than your original mortgage and you may be entitled to a better deal as a consequence. At The Mortgage Hut we can compare your ported mortgage offer with a range of new house mover mortgages to see if it is is favourable.

Getting a new mortgage

Obtaining a completely new house mover mortgage means paying off the old one and taking out a brand-new application. In many ways, it is the same as the first time you got a mortgage only you are likely to have substantial advantages the second time around.

A larger deposit (and lower LTV)


When you first bought your home, you had to save for years to put together your deposit, but the second time around the equity from your first home will represent your deposit for your second.
Your equity is the value of your home once the mortgage secured on it is fully paid off – hopefully this is a considerable amount which represents all the payments you have made as well as the rise in your property’s value over time.

For example:

Harold and Simon bought their house together ten years earlier for £145,000. At the time they needed a 95% LTV mortgage totalling £137,750. 

In the intervening years, they have paid enough to mean their outstanding mortgage balance is £90,300 and their house value has increased to £188,000. The value of their equity is £97,700. 

They plan to use £12,700 to cover any fees and pay for house improvements as soon as they move in, leaving £85,000 to use as a deposit on their new home. 

They find an appropriate house for £230,000. With their deposit, the new mortgage they need is for £145,000 and represents a loan-to-value of 63.05%.


Access to better deals

A lower LTV mortgage (like the 63% in the example above) is going to be on far better terms than the 90% or 95% LTV deal you got the first time around.
This shopping power means we can work with you to get you a mortgage with lower interest rates and lower monthly repayments, often even if the house you are moving to has a greater value than your old property!

Experience

Nothing can replace the advantage of experience. Working with us gives you access to the many decades of combined experience our team possess, but don’t discount your own experience from the first time around.

You doubtless understand more about the different types of mortgage product on offer, have a better idea on how to budget and understand your credit history to a far greater depth – all education that will help you get a new mortgage that really suits you.

Getting a new mortgage – quick questions

Q: I have suffered some bad credit history in recent years – will this affect my new mortgage?


A: In truth, yes. Any adverse credit history is going to make an impact on your mortgage application, but this would be true whether you apply for a new mortgage or try to port your old one. Our bad credit experts will be able to help you get a mortgage with bad credit and your (hopefully) increased equity in your home will help a lot.

Q: Can I stay with my current lender if I don’t port my mortgage?


A: Yes. No lender is about to reject your application for a new mortgage just because you want a different product to porting your mortgage – in fact, your current lender is going to be keen to keep your business and may offer you some excellent deals to do so.

Q: Will I need to go through a full application process?


A: Yes. You are applying for a new mortgage in the same way as anyone else and will have to pass affordability checks, credit history checks and income assessment in the same way as before.

The costs of moving house

Unfortunately, moving house in the UK isn’t cheap. National statistics quote the estimated cost of moving house (2018) as £8,885.66 so doing everything you can to minimise this expenditure is a good idea!

Early repayment fees


Depending on your mortgage deal, you may have to face early repayment charges. These fees are typical during the initial deal portion of your mortgage (for example, the first few years with a fixed interest rate) but may be in the terms of your current mortgage for many years. It is well worth finding out in advance if you will have to face early repayment fees by contacting your mortgage provider.

You can ask your current lender to provide a redemption statement for a breakdown of any early repayment fees that will be applied when you end the current mortgage.
Early repayment fees are typically 1% to 5% of the outstanding balance of the mortgage, so tend to represent thousands of pounds that you will have to factor in to your moving costs.

Stamp duty land tax (SDLT)

When you bought your first home as a first time buyer you would have been in receipt of a substantial stamp duty discount and may not have paid any duty at all. Unfortunately, this is not the case when you move house to a new home.

Stamp duty is a tax paid by the buyer of any property or land in the UK and is charged on all property valued at £125,000 and above. You pay 2% on the portion of the value from £125,001 to £250,000 and then 5% for the next £675,000 (with higher rates beyond that).

This means, for example, that a property valued at £275,000 will incur stamp duty of £3,750.

Note: There is a 3% surcharge on all SDLT if you own multiple properties. Under normal house moving circumstances, you sell your old house at the same time as buying the new one, so you don’t own two properties at once, but if there is a delay in selling your old home then you would have to pay the surcharge for owning two properties at once. On a £275,000 house this would be an additional £8,250 to pay! Thankfully, you can apply for a rebate of this amount once you sell your old house (as long as it is within 36 months). [This note might benefit from a box out, and a break in the paragraphs if you do so.]


Legal fees

Just as when you first got a mortgage, the solicitors are needed to get involved for moving house. Due the the delicate timing of any chain (discussed later in this guide), solicitors can be more important (and more expensive) when moving to a new home than they were for your first mortgage. Effectively you are using your solicitors twice as much – once to buy a house and once to sell one.


Homebuyer’s report and survey


You will need to have a report done on the condition of your new home, and with the experience of having bought a property before (and maintained it), you may find yourself considering a more in- depth report!


Valuation fees

Your lender may offer free valuation of your new property, but it is typically a charge passed on to the buyer.


Mortgage arrangement fees


As there was the first time, there are costs associated with arranging the mortgage. At The Mortgage Hut we can work with you to take care of many of the smaller administrative costs and present them as a single fee for your convenience.


Estate agent fees


Now you are selling your property, you will incur fees from the estate agents who manage that sale (covered in selling your house later in this guide).


Moving costs

Unless you have few possessions (or your own very large van!) you will need to consider the cost of a removals company. A number of smaller administrative costs will also crop up (such as setting up a postal redirection, moving your broadband connection or updating your address on your identification) and you should put aside some money to cover these.


Saving money on costs

Different providers will come with their own quotes for expenses and it’s worth shopping around. Whether it means picking a different solicitor company or obtaining quotes from multiple removals companies, taking some time picking the most affordable company that suits you could save you hundreds of pounds over the moving period.

At The Mortgage Hut we are very conscious of the costs to our customers and will make sure every fee is transparent and there are no horrible (and expensive) surprises late in the process.

The costs of moving house – quick questions

Q: Can I avoid any costs?

A: Some fees are unavoidable – anything with a legal responsibility, such as stamp duty or the cost of conveyancing simply cannot be skipped, but it is possible to go the long way round to avoid others (such as advertising to sell your home yourself, moving your own furniture and even finding your own mortgage without help from The Mortgage Hut (!)).

The question really is ‘is it worth it?’. Often the time saved and expertise gained works out better in the long run. Will you get as high a price for your home without an estate agent? Can you find a better mortgage deal than The Mortgage Hut? Have you considered the cost of fuel driving your own car fifteen times between properties to move? – typically, the answers to these questions is ‘no’.

Selling your house

You’ve found an exciting new home that properly suits the changes in your life – more room for the kids, a bigger garden or just closer to work – how do you go about selling your old one so that you can make the move?

It’s easy to put your focus into the new house, but keeping up the enthusiasm for the last few months of living in your old home is going to be valuable.

Working with an estate agent


Remember that the first estate agent you visit doesn’t have to be the one you stick with! Shop around and find an agent who you feel comfortable with. You are trusting them to sell on your largest asset and that won’t work to its fullest if there’s even a slight personality clash.

Discuss their fees early on and compare them to other quotes so that you know what your move is going to cost and get multiple valuations before determining the price to put your house on the market.

Spend time with your estate agent showing them the highlights of your property. You’ve lived there for years, so you know what stands out as a selling point and the things that are promoting you to move. Let the estate agent hear your enthusiasm for those things you are going to miss as it will help them do their job.


Doing it alone

There are plenty of online property advertising sites that can mean you can do the selling yourself and if you are an able sales person with a willingness to put the time and effort it to sell your house then there’s no problem with doing it yourself. Remember, however, that there are pitfalls to being an estate agent that you are likely to fall into and if you value your time highly then it might simply be more cost effective to get an agent to sell for you.

Agents can be expensive, with their services costed as a percentage of your sale price, and doing the selling yourself can save you thousands if you get it right, but ask yourself if you are going to be wiling to take an offer that strips away that saving to be rid of the stress and difficulty you have put yourself in – if the answer is ‘yes’, then you may be better off employing a professional to do it for you.

Presenting your property

Whether you are being the front sales team for your property or if you have an agent doing everything for you, when someone comes round to view your home it is up to you to make sure that they come to something enticing.

Everything you can do to make it more attractive will not only increase the speed of the sale, but it can add to the value. Something as simple as weeding and mowing the lawn can change the opinion of a potential buyer by thousands of pounds!
A property on the market for £250,000 with gardens in a state of total disrepair filled with discarded junk is less likely to sell for its asking price than an identical property priced at £255,000 with beautifully tended flowerbeds. £5,000 for a weekend with a strimmer? It’s worth it every time.

Return your property to the finest it has ever been, although don’t be surprised if it makes you question your desire to leave in the first place! Here are some tips:

  • Pair down your clutter – cleaning up your possessions and doing a thorough spring clean will serve double purpose here, making your old house look better while also making your packing for the move that much simpler! Go through the drawer of cables and be ruthless, recycle old papers and magazines, clean everything right down to the core of the house.
  • Fix every cosmetic issue – light bulb gone in the spare room, curtains suffering from a little staining and age, shelf hanging at a funny angle in the kitchen… make sure you bring everything back to life.
  • Undo the wear and tear – some larger issues, such as peeling wallpaper, broken kitchen tiles or damage to the kitchen could require minor investment and greater effort, but it’s worth it. If it’s within your capabilities to solve the problem, then solve it.
  • Make sure the outside is inviting – weed gardens, make sure all grass is neatly cut and fix any minor external DIY issues.
  • Paint as much of the house as is viable with a neutral colour – you might have thought a deep red feature wall in the living red was a good idea, but the chances are the next occupants will see it differently. Brightening up every room will do wonders.
  • Clean windows, skirting, shelves etc. – it might not have formed part of your every-day tidy, but take the time out to properly clean the house now you want to sell it.

  • Make sure it smells fantastic – you don’t need to go as far as baking bread, but a good clean smell and fresh air throughout the property is going to help the sale.
  • Finally, make it homely on the day – arrange cushions, put out flowers, make sure the bathrooms have clean towels and a full roll of toilet paper. Those final touches count.

Accepting an offer

You should know the minimum you are willing to accept and not budge from that point unless enough time passes that it is obvious you are being unrealistic. Once you have an offer you are happy with you can move on to the actual sale.

Selling your house – quick questions

Q: How long does it take to sell a house?

A: Unfortunately it’s a ‘how long is a piece of string’ answer. No one can say how long it will take to sell your house, but a well presented property matched with a realistic selling price is going to sell faster than an untidy house or one with a top end asking price. Some houses sit on the market for years while sellers refuse to adjust their price, others shift in a few days with offers above that asked for – market factors can be quite in-depth and complicated.

Q: Should I make large improvements?


A: It is important that you consider the financial advantages of any large improvements. Some people opt to have attic conversions done or new central heating put in prior to selling the house, and it can add significant value to the property, but there’s a reasonable case to be made for holding back on that spend and selling the house in its true state so that you can move on and any new occupants can make the changes if they want. Speak to your estate agent for an insight into the market desire for the area.

Links in the chain

If you’ve only ever been a first-time buyer then you have only had a minor interaction with ‘the chain’. This line of property transactions can be the most frustrating thing about moving house and understanding it is important to a smooth and relaxing move. 

The property chain is the number of homes that are going to be bought and sold to complete the transaction – and your position in it is merely a single link.  You will be selling one house and buying another. The person you are buying from is selling theirs and buying another. The person they are buying from is selling theirs and buying another…

Plus the person you are selling to is buying your home and selling another. The person they are selling to is buying that home and selling another…

At the bottom of the chain is someone looking to buy who has nothing to sell (usually, a first-time buyer) and the top of the chain is someone selling who doesn’t need to use the money to buy.

The real problem comes in that every single one of the buying and selling contacts that need to be completed have to happen all in the same day to avoid someone selling their home and having nowhere to live if a problem stops their purchase. Another important factor is stamp duty – owning two properties at once (if you buy before you have sold) means a 3% surcharge on land tax which can add many thousands of pounds onto the cost of the new home.

Thankfully there are a few things you can do to keep the process running and be as helpful as
possible.

  • Trust your conveyancer – you don’t need to deal with most of this as you are paying someone to do it for you. Trust them to do their job.
  • Be patient – as part of trusting, you should be patient, but that doesn’t mean you should ignore the process or have no interest.
  • Be communicative – be sure to contact your conveyancer regularly and chase them up if nothing seems to be happening.
  • Be aware of other people’s commitments – there’s little you can do about other people’s schedule, but knowing when there’s likely to be a delay because of a solicitor’s holiday, for example, will stop you worrying.
  • Fix any problems immediately – don’t be the weakest link. If you are the cause of a delay, then you could ruin everyone’s plans – including your own. If something is pointed out in the survey of your house that needs to be resolved, treat it as a priority.
  • Don’t rely on the promises of a potential buyer – nothing is set in stone until the contracts are signed and your buyer may pull out at any time. Leave your property on the market until your buyer has a mortgage agreement in principle to show you so you know they are serious about their offer.
  • Don’t stop shopping yourself – there’s a chance the property you are planning to buy will drop out of the chain too, so keep looking and don’t put too much enthusiasm into this one chance as you could be disappointed.

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