There are any number of variables to consider when moving home, but some of the most important factors to remember will include informing utility companies, TV, Broadband and other service providers of your intention to move; contacting your local Post Office to apply for mail redirection and contacting your local authority for an up-to-date Council Tax statement.
The vast majority of contemporary mortgage packages are transferable (or ‘portable’) from one property to another (subject to valuation costs and probable transference fees of £3-400) so you will not necessarily have to change your current deal. However, it may be a good idea to seize this moment to secure a better deal on your mortgage and to take advantage of competitive rates or terms that are more favourable to your circumstances. However, if you do decide to change mortgage you will need to work out if your current loan is subject to any penalties or charges and factor in these costs accordingly. These might include:
Early repayment charges: Usually charged at 1-5% of the outstanding loan, a percentage of the original loan amount or amount already paid or interest on a set number of months. Either way, always make sure that the benefits of a prospective deal are significant enough to offset any losses here.
If, after having taken all of the above costs into account, you decide to proceed with a mortgage, make sure that you take a suitable amount of time to shop around and consider all of the available options (although you could also approach your current lender to see if they are prepared to match the terms of a chosen deal, thereby potentially saving time, money and hassle).
You will also need to consider what type of mortgage you want (such as a fixed rate, tracker or discount mortgage for example). All of these options are subject to both pros and cons, so you should probably speak to an independent mortgage adviser to help you make your decision.
If you are thinking of moving from your current home to another property, you will first need to establish whether you have sufficient savings, equity, or assets to accommodate all of the necessary expenses associated with such an undertaking.
In order to do this, you will need to determine how much you are likely to achieve on the sale of your home (with at least three quotes from estate agents recommended before you proceed), how much your estate agent will charge to sell the property, the balance of your existing mortgage as well as the total cost of the new house (including, crucially, the cost of any solicitors or surveyors that will be needed to complete the transaction, the mortgage fees that will be charged by your lender, stamp duty costs, insurance costs and removal costs etc).
By subtracting these overall amounts from the probable equity generated by the sale of an existing property, you should be able to work out fairly accurately how much you will be able to use as a deposit on your new purchase.
This means that the more time taken at this early stage to research and to fully estimate fees and other relative outgoings, the better you will be able to plan your budget. For example, most experts advise potential movers to limit their monthly repayment amounts to no more than a third of monthly income (after tax) as the impact of any possible increase in interest rates could absorb your monthly surplus budget. It is also advisable to allow for at least 5-20% of the property total in advance of purchase as this reduces the amount you will have to pay back in the long-term and give you access to a wider choice of mortgage products.
A lender will establish the maximum you can borrow by conducting affordability calculations. The main aspects they will look at will be income and outgoings, a broad spectrum of outgoings will be considered dependent on lender, please take into account the following; credit cards, loans, pension, insurances, and childcare. Incomes that may be considered include and are not limited to; employment/self-employment income, pension income, investment income, benefit income.
“As first time buyers, both myself and my partner were both completely clueless about the mortgage process. We were recommended Charles Louis Mortgage Advisers and we were not left disappointed! Michelle was extremely helpful in getting all the necessary information over to us, keeping us updated on where we were up to in the process and also answering any questions which we had. We both feel that by using Charles Louis Mortgage Advisers, the process was made so much quicker and easier and we felt that we were in safe hands in getting the best mortgage for us. We couldn't have done it without them and especially Michelle” ”M Williams
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