A Guide to Moving House with a Mortgage

Feeling like you’ve outgrown your first home? It may be time to start prepping to take your next step on the property ladder. But moving house (and mortgage!) is a slightly different process than the first time around. So, what exactly is involved in moving home with an existing mortgage in tow? 

It’s a good question – and we’re sure you’ve got a few more of them. Do you make an offer, or sell your home first? Can you bring your mortgage from one house to the next? Keep reading to find out what you need to know with our guide to moving with a mortgage. And if there’s more you want to ask, our knowledgeable Purplebricks Mortgage advisors are always ready to give you the info you need, minus the bull.

Steps to moving house at a glance:

• Review your existing mortgage

• What can you borrow on your next home?

• Search for your new home

• Select your ideal homemovers mortgage 

• Put your property on the market

• Surveys and solicitors

• Exchange of contracts

There are a few steps – but buying a new home is pretty straightforward. Let’s delve a little deeper into exactly what’s involved in home moving.

Review your existing mortgage

An essential first step is to review your current mortgage so you can start your journey off on the right foot. You’ll need to know the type of mortgage you’re currently on. If you’re in the middle of a fixed rate deal, for example, you might end up having to pay an early repayment charge, or you may be able to port your mortgage.

If you’re not sure what your current mortgage means for your home move, we’re here to help. Chat to one of our expert advisors to get an understanding of which mortgage deal is right for you.

What can you borrow on your next home?

Your finances have probably changed since you bought your current home. There are a few things that impact what you can borrow:

• Your income and outgoings: Similar to when you bought your first home, your finances dictate what you can borrow. In an ideal situation, your income will have increased, or you may have fewer outgoing costs. This means you can prove to lenders that you’re able to afford more you’re looking to upsize.

• Equity in your home: You’ll need a deposit to secure your homemovers mortgage. Usually, when you sell your current home, the money you’ve already paid into you mortgage (as well as your initial deposit) can be used for your next purchase.

• Your home’s value: Alongside what you’ve paid in, the value of your home may also have changed. If it’s increased, this also counts as equity and can be used towards your next deposit. And remember, the higher your deposit, the more attractive interest rates you’re likely to unlock.

• Monthly bills: When deciding how much you can borrow on your new home, you also need to consider what monthly costs you can afford. With a higher mortgage payment, would you still be able to pay your current household bills? 

• Any credit agreements: Your mortgage lender will also review any new credit commitments, like personal loans, car finance, or credit cards. They’ll use this information to decide how much of a risk you are to lend money to for your next home. New lines of credit might impact the maximum amount they’re willing to let you borrow. 

This stage is a good time to get a mortgage in principle, so you’ll have an idea of what a lender might offer you. A mortgage advisor can help you understand what that figure looks like. They understand the requirements of different lenders, and what their affordability checks look like, so you’ll be in good stead to secure the mortgage you’re after. An advisor can also look at what your current lender will offer you and compare it to the wider market – so you can be sure to secure the right deal for you.

Search for your new home

Now for the fun part! You get to hop online and browse properties for sale in your ideal area. Keep in mind the reasons you want to move – are you after more storage space? Do you need extra room for a growing family? Dreaming of a work-from-home office? Or are you looking to downsize?

Like you did when you looked for your first home, keep your must-have list in mind, and take your time viewing properties. Look into the area, transport links, local shops, and any other factors that are important to you. You know what is and isn’t negotiable, so make sure to offer on the home that meets your needs.

Select your ideal mortgage

As a home mover, how does a mortgage work?

Once your offer is accepted and you’re ready to apply for a mortgage, you have a couple of options:

• Porting your mortgage: If your mortgage is ‘portable’, you can transfer your current mortgage to your new home. This means you keep the terms and conditions of your initial mortgage, but there’s no guarantee your lender will let you, so be sure to check.  
   
  You’re technically reapplying for your mortgage when you port it, so you’ll need to consider whether you meet the criteria set out by the lender. You may also be subject to fees, like an early exit fee.

• Take out a new mortgage elsewhere: The other choice is to find a new deal with your current lender or a new one. You’ll likely have to pay a penalty for leaving your existing mortgage early, but this option might suit your circumstances if you want to unlock more attractive rates and deals when moving house with a mortgage. 

So which is best for you? It comes down to the numbers. You’ll need to work out whether the cost of a new deal and the associated fees leaves you better off than sticking with your current mortgage. If you’re not sure what your best option is, a Purplebricks Mortgage advisor can talk you through all of your mortgage options.

Put your property on the market

As a home mover, you have two options for selling your home. You can sell before you buy, or you can buy before you sell.

• Selling before you buy: Selling your current home before buying your next puts you in a good position when making offers. But bear in mind this will put you in a selling chain. This means there’s a sequence of home sales, and each transaction depends on the previous one going through.

• Buying before you sell: In this scenario, you’re liable for a large outgoing cost – as you’ll need to cover the expenses on both the home you’re buying and the one you’re selling. So, you’ll need to keep paying your mortgage on your old house until it’s sold, as well as any other bills. You also can’t use your existing mortgage to cover your new home.

House chains and moving home mortgages aren’t as confusing as they may seem. And keeping everything in order on your end, like your finances, a mortgage in principle, and your documentation, can be a huge help. If you’re not sure what to do about buying and selling, one of our expert advisors can help you figure out what your next move should be.

Surveys and solicitors

You’ve bought a home before, so this probably isn’t new to you. But here’s a refresher if you need it.

• Getting a survey: Your home is probably your most expensive asset, so you want to know everything you can before tying yourself into a years-long mortgage deal. And usually, your mortgage lender will require a basic survey ahead of your mortgage anyway. There are a few different levels and types of survey, with the costlier surveys often diving into more detail about the house. They’ll look at things like structure, subsidence, and damp, and more. And if you discover something you’re not willing to fix at this stage, you still have options – like lowering your offer, or pulling out altogether.

• The legalities: Once your offer is accepted, you’ll need a solicitor or conveyancer to handle the legal side of your purchase. They’ll contact the seller’s solicitor, carry out searches on things like planning and water, and draw up the necessary contracts to reach completion. Having a good solicitor onside can be a huge help in moving your purchase forwards, so make sure to shop around and look at reviews.

Exchange of contracts

The end is in sight! On the chosen day for exchange of contracts, the solicitors at the bottom of the chain will kick things off. They’ll let the next step up in the chain know when they have a signed contract and the correct cash in hand. A timeline is usually agreed between everyone in the chain, and depending on how long the chain is, this can be around one or two weeks. All the solicitors in the chain will agree on a ‘release time’ – which means every buyer and seller in the chain confirm the correct money and contracts are in place.

The gap between exchange of contracts and completion can come in handy for home movers. It means you have time to finish up packing and make arrangements for moving day.

Take the stress off your home mover mortgage

There are a few steps when it comes to moving home, and quite a lot to tick off the ‘to-do’ list. The mortgaging portion of the home moving process doesn’t need to be painful, though – and you don’t have to tackle it alone. Whether you’ve got a budget in mind, need help working out exactly what you can afford, or are ready to secure a mortgage on your dream home, chat to a Purplebricks Mortgage advisor. They’ll do the heavy lifting of browsing rates, deals, and terms and conditions, and present you with a mortgage deal that suits your needs. We do it every day, after all.