Home Mover Mortgages

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Home Mover Mortgages

Home Mover Mortgage

Paul Collinson talks us through home mover mortgages.

What types of properties can be purchased as a home mover? What type of mortgage can I get?

You can buy any type of residential property such as a house or a flat. Different lenders have different criteria around specific types of building, but we can look at that to find the right deal for you.

In terms of the type of mortgage, we can still look at fixed rate and variable rates. The same mortgages are available to home movers, First Time Buyers or those remortgaging, really.

What is a Mortgage in Principle and how do I get one as a home mover?

This is an initial affordability check, based on your financial situation. It’s not a guarantee from the lender to offer the loan at the end, it’s a check based on your income and commitments to calculate your maximum loan potential.

We can issue the Mortgage in Principle based on that. Some estate agents do ask for one of those so we’ve got no problem issuing this if you need one.

How long does the mortgage application process take for a home mover?

We can normally get an application to mortgage offer stage with most lenders within around two weeks – sometimes a little less. Once you bring in the solicitors, depending on how busy local councils are with their searches and everything, the whole process normally takes between six and ten weeks.

What is the maximum that could be borrowed on a mortgage as a home mover? What is the minimum deposit required?

This is pretty much unlimited depending on your income, commitments and your deposit amount. Lenders will calculate your borrowing as a multiple of your income – generally around 4.5 to five times your annual income. They also look at your commitments in the background.

The minimum deposit is 5%, but if you put more in, that’s less risk for the lenders so you could borrow more based on that. If your income is at a higher value, perhaps £100,000, you might be able to borrow up to £500,000 with a 5% deposit.

If the income is higher than that and you’ve got more of a deposit, you could borrow into the millions.

What are the eligibility criteria for a mortgage as a home mover?

Buying as a home mover basically means you own a property and you’re selling it to buy another one. Or, perhaps you’ve previously owned a property and you’re renting now. It’s basically anything other than a First Time Buyer or someone remortgaging their property.

To get a mortgage, you would need some sort of income that supports your commitments and anything else in the background such as dependants, loans, hire purchase or credit card balances.

Can I get a mortgage as a home mover if I have bad credit?

Yes, you can but it depends on the level of bad credit. It could be certain things like missed payments or defaults, in which case when those occurred is important.

If you had a missed payment that was six years ago it’s not going to affect you in any way. If those missed payments were in the last year or two, that could be an issue.

You might have a default that’s only £100 – but if it’s £3,000 lenders will be a lot more stringent. It’s worth having a conversation with us here at Brick to Brick – we look at the whole credit file as a whole. We have to look at everyone’s situation closely because they are all completely different.

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What does porting a mortgage mean?

If someone wants to port a mortgage, they keep their existing mortgage and move it over to a new property. Perhaps you’re selling one house and buying another. You’re in a fixed period on your mortgage that you don’t want to come out of because there’s an early repayment charge on it – so you can port it over to the new property.

Most lenders are okay with this, but some are not. There are stipulations in your contract, so we can look at that if you think this is a future option when you initially take out a mortgage.

The general criteria with porting is your circumstances will be reassessed and the onward property will need to fit the lender’s criteria and risk appetite.

Often the new property is worth more, in which case you would normally need two mortgages – your original, ported mortgage and a top up mortgage, usually with the same lender.

The disadvantage of that is you’re constantly remortgaging. You might have one deal with a year left and you then take out a two year top up mortgage deal. At some point you have to remortgage them both and pay a smaller repayment charge to get them both aligned. But those are things that we can discuss. Every customer situation is different.

What is the duration of a home mover mortgage?

They can go up to 40 years at the moment with some lenders [podcast recorded in March 2024]. Most lenders will go to 35 years and generally lend up until the age of 70. I do have lenders out there that could potentially go to the age of 80.

Whether you want to be paying a mortgage when you’re 80 years old is another thing, but some people desperately want to bring those payments down. Maybe the rates are higher than they thought, so they go for a longer mortgage term and hope rates come down in the future. There are a variety of options to help you, really.

What fees are associated with a remortgage as a home mover?

Some lenders have a product fee, which is generally around £999. Some don’t have a fee, but when we look at the deals we take these into account over the whole two or five year fixed period. We compare the deals with and without the fee.

For example, if the rate is low and there’s a fee on it we can compare the overall cost with a fee-free mortgage at a higher rate. We recommend the most appropriate option for each client to ensure they’re not paying too much for their mortgage.

What happens if I can’t keep up with repayments on my mortgage as a home mover?

It’s not the best thing to miss any mortgage payments. Obviously sometimes people do miss payments on a credit card or a loan by mistake, and it doesn’t have a huge effect.

But when you miss payments on a mortgage, it doesn’t look great at all to a lender. It doesn’t give them confidence. If it was just one missed payment and it was more than a year ago, they are more likely to be okay with it. But if it’s happened in the last six months a high street lender wouldn’t give you a mortgage at all.

With other lenders, it would need to be three months or six months ago as an absolute minimum. We might also be able to look at something called a subprime lender, but they’re normally at higher rates of interest. So do try and avoid missing a mortgage payment if you can.

Is it more difficult to get a mortgage as a home mover if I’m self-employed?

We specialise in self-employed mortgages and there are different ways that people are paid. For example, if you’re a sole trader, a lender would look at your net profit over the last two or three years.

For a limited company, they generally look at dividends and salary. Some lenders out there will look at net profit and salary as well.

When you are employed, you need 3 months payslips but there are lenders that would consider one month’s payslip if you have only been in this employment for one month (a couple of lenders only need a contract if within 3 months of starting the role), whereas if you’re self-employed, it’s slightly more difficult – you would need at least two years’ records with most lenders. This would be in the form of either 2 years accounts or 2 years of SA302 tax calculations and tax year overviews.

When you are employed, you only really need one month’s payslips with most lenders, whereas if you’re self-employed, it’s slightly more difficult – you would need at least two years’ records with most lenders.

I’ve got one lender that would consider one year self-employed if you’ve had a good enough year to fit the affordability – so one year is the minimum.

How can a mortgage broker help if somebody is looking to move home?

Come and find out what your maximum borrowing is, so you know what property values to look at. People often make the mistake of looking at properties and then finding out that they’re unaffordable. Just come to us and we will check that maximum borrowing for you.

We then manage the rest of the process with you and help you all the way until the day that you move in.


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