Home Mover Mortgages
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Home Mover Mortgage
What types of properties can be purchased as a home mover? What type of mortgage can I get as a home mover?
It’s really any property – standard homes, apartments and flats. We sometimes see properties that are a little bit more quirky, that might be non-standard construction. They might be built using concrete or a steel frame.
In terms of the type of mortgages that you can get, they fall into the usual standard types – fixed rate mortgages, tracker mortgages – the full range of mortgages would be available to a home mover.
It’s up to the advisor to look at the home mover’s circumstances to assess the most suitable mortgage for that particular person and the type of property that they’re looking to buy.
What is a Mortgage in Principle and how do I get one as a home mover?
With a Mortgage in Principle the lender is agreeing to lend you a specific mortgage amount. It tells you that you can get the mortgage that you want.
You will receive an Agreement in Principle certificate that can be given to an estate agent to prove that you are eligible to purchase a property. It shows you’ve been financially qualified by a professional and you are able to proceed with the offer you’ve made.
Hopefully, as a home mover you’ve already spoken to your advisor prior to looking at properties so you know your budget. We can then get you that Agreement in Principle so you know that it’s definitely possible for you to proceed.
From our point of view as advisors, we would recommend anybody looking to move home to seek advice as soon as possible. Having an Agreement in Principle in hand early on in the process is absolutely ideal.
How long does the mortgage application process take for a home mover?
It can vary quite widely. The home moving process is broken down into different parts, starting with that initial conversation with an estate agent to get your home ready and find a buyer for your house.
It can take a couple of weeks to a few months to find the right person to buy your property. You would need to be simultaneously looking for a property to buy.
Once your offer is accepted you then go through the mortgage application process and then into the solicitors and the conveyancing process. That will very much depend on how many people are in the chain of properties with you. If it’s a reasonably short chain, where perhaps you find a First Time Buyer to buy your house and the property that you’re buying isn’t also buying on, you could be looking at maybe three to four months to get over the line.
If it’s more complicated, perhaps because issues come up on the conveyancing side or there’s a number of people in the chain, it could take anywhere from six to 12 months. Our record was around two years – that was quite an extreme example. Three to six months is a more reasonable timeframe.
What’s the minimum deposit and maximum amount that can be borrowed on a mortgage as a home mover?
The minimum deposit that you would have to put in is 5%, which means the maximum borrowing is 95% against the value of the property you’re purchasing.
But so many factors come into that, in terms of how much is available to an individual and how much they’re wanting to put in. These are things you would talk to an advisor about. We can look at the benefits of putting a little bit more in if you can come up with that extra deposit. Is it going to mean you can get that dream property?
It’s important to speak to a qualified advisor who can understand your circumstances and look at the whole picture. We’ve had clients come to us for an idea of what they could borrow on the basis of what they’ve quickly Googled or seen on comparison sites.
But actually when we sit down with them and look at everything, some clients can achieve the property of their dreams – that they didn’t think was possible.
What are the eligibility criteria for a mortgage as a home mover?
There are three key areas that a lender would look at – the amount of deposit, the level of income and your affordability, and your overall credit score.
Your advisor would look at these with you to determine your eligibility for that mortgage and the potential budget for a new property.
Can I get a mortgage as a home mover if I have bad credit?
Absolutely. Bad credit isn’t a barrier, but it does sometimes create the odd hurdle that we may need to get over. It all comes down to speaking to a qualified advisor.
You may just approach your current mortgage lender and they might say it’s not possible with your credit situation. Showing us your credit report will allow us to identify the correct lender to place you with. There are lenders out there for everybody, and that’s why an advisor with access to the whole market gives you the best chance of securing that mortgage.
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What does porting a mortgage mean?
Porting is where you have a mortgage on your current property, and you transfer that onto the new home.
The key reasons why you would want to do this, and why your advisor would recommend this, are primarily if you’re on a fixed interest rate. These often have a penalty attached to them if you were to repay that mortgage early.
Porting a mortgage would in most instances avoid you having to pay any early repayment charges on your current mortgage. It would also mean that you keep the existing mortgage rate that you have at the moment.
This is particularly relevant currently, where mortgage rates are higher than they have been over the last 10 or 15 years [podcast recorded in May 2024]. Some clients may be on a much lower fixed rate from two or three years ago, so it would make sense to explore opportunities to keep that rate and move it to a new property.
What is the duration of a home mover mortgage?
That’s going to come down to the individual client. But as a rule of thumb, you can take a standard residential mortgage to age 70. We would look at a client’s age, knowing that the maximum length of a mortgage is 40 years.
There are lenders out there now who are really understanding, and are building products for clients who may want to work beyond the prescribed retirement ages of maybe 67 or 68.
So there really is greater flexibility around the length of a mortgage, and there are products for all generations of home movers. A qualified advisor will guide you through and work out the most appropriate term or duration for your mortgage.
What are the fees associated with the mortgage as a home mover?
Fees will vary depending on the lender and the product. Your advisor will look at the specific circumstances and work out whether a product with a fee will be more cost effective over time.
Other fees to consider would be estate agency fees, solicitors fees, stamp duty, removal costs and a survey on the new property. Again, an advisor will be able to run through all of those fees with you, explain when those would be payable and highlight different ways to cover the costs of moving.
What happens if I can’t keep up with repayments on a mortgage as a home mover?
We would always encourage anyone that’s struggling with their mortgage payments to contact their lender, firstly, and see if there’s anything they can do to support you. They can suggest ways to maintain some degree of payment via a special arrangement with them.
If that still isn’t maintainable, you can speak to the advisor you contacted originally and see if they can help you. But ultimately, you should go to your lender and do everything you can to keep up those repayments.
Is it more difficult to get a mortgage as a home mover if I’m self-employed?
I don’t think it’s more difficult. The way that a lender will assess your income is different to how they assess an employed applicant. There are different ways you can be self-employed.
You could be a sole trader, a partner or have your own limited company, which can change how lenders will assess your income. An advisor will look at the widest possible choice of lenders and assess your individual circumstances – and that’s absolutely crucial when you’re self-employed.
I would strongly advise against just speaking to your own bank or building society because they’ll only have access to their rulebook. The difference between lenders can be huge, so we would recommend you seek advice.
How else can an advisor help with a home mover mortgage?
Here at Thomas Nicholas, Jadie and I pride ourselves on holding people’s hands right the way through the moving process. The mortgage is obviously a very important part of that, but actually in the overall timeline of moving, it’s quite small.
We would be involved very heavily in the first week or two to get that mortgage approval through from the lender. But as we mentioned, it can take upwards of six months for the actual whole process to get over the line.
A lot goes on in that time that people don’t always see. We can help chase up solicitors and look over things that they might ask you for. We share advice and help on surveys or other checks you might need to do on the property.
We also review insurance with you. We can update life insurance if you’ve already got that on an existing property – especially if you’re increasing your mortgage balance. So although we are labelled as mortgage advisors, there’s a whole myriad of other services we can help with in the background. We ensure the whole process is as smooth as possible as it can be for you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.