Buying your next home can be as daunting as it was when you bought your first, but whether your family is growing, or your current place just isn’t enough for you anymore, moving on is part of life.
With a bit of preparation, getting a mortgage on your next home won’t be nearly as stressful as you might imagine. Follow these four steps and you’ll be up to speed on how it all works in no time.
Step 1: Get an up-to-date mortgage statement
First, you need to know how much is left on your mortgage. Speak to your lender about getting an up-to-date statement and then ask them:
- Can your mortgage be moved to your new property?
- Can it be moved within your existing terms?
- If not, can they do a free product transfer?
- What will it cost you to come out of the mortgage early?
- When you exit a mortgage deal before the end of its term, you might have to pay Early Repayment Charges (ERCs) and exit fees, especially if you’re moving to a new lender.
If you use a free mortgage product transfer with your current lender instead of remortgaging with someone else you’ll save on these fees and face far less paperwork. The downside here is that you could be missing out on better deals elsewhere, so it’s best to do a comparison with other lenders because, even with fees factored in, you could still save by moving.
Step 2: Get the value of your home
Property prices generally rise every year. A valuation will give you an accurate view on how your home has increased in value since you bought it.
The added value is yours to keep when you sell, but don’t forget to subtract costs such as legal fees, estate agent charges, and ERCs. You can use the remainder towards the deposit and fees on your next place.
Step 3: Get a feel for your mortgage options
Our mortgage calculator can help you decide how much you want to spend on your next home and what the monthly repayments will be. The main things that affect the monthly repayments are:
- Term - the longer the mortgages term the lower the payments
- Borrowing - the more you borrow the more your repayments will be. A bigger deposit is likely to reduce your monthly payments
- Fixed-rate period - the longer you fix for, the higher the rate tends to be
Step 4: Go house shopping
With a solid idea of what you’ll be able to borrow, you can then look at properties in your price range and start dreaming of a happy life in your new place.
When you get to step 3, Mojo Mortgages can help. Our mortgage comparison and brokerage service will help you find the right deal for you from the comfort of your sofa in as little as 15 minutes.