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When securing a mortgage as a first time buyer, the different terminology, rates and options available can seem pretty overwhelming and it’s easy to soon feel trapped in a mortgage you are unhappy with. You may be looking for a different type of mortgage or simply want to shop around for a good deal so when looking to move house it can be a great opportunity to search the market for a better deal. You don’t automatically need to find a new mortgage when moving home, as some mortgages are transferable but you will need to check this with your current lender if you are unsure. The value of your new home will need to be less than the original loan you got on your property in order to do this. If you are looking to downsize then this option may be ideal for you, unless you are looking for a better deal on your existing mortgage. However it is also important to be aware that you may have to pay a fee for transferring your mortgage to another property.
Costs are likely to include a valuation by your mortgage company for your new home, as well as a mortgage arrangement fee. You may also have to pay a fee to end your current mortgage, so be sure to check with your current lender what costs may be involved for either moving your mortgage over to a new property or switching to a different lender altogether. In some cases you may have no choice but to organise a new mortgage as many or not transferrable.
And don’t forget that even if your current lender confirms that you are able to transfer your existing mortgage, you may still benefit from getting a better deal elsewhere. You can search online for comparisons on mortgages and with already having a mortgage you may be in a better position to get a much better deal on a mortgage compared to a first time buyer but you may not be entitled to many of the incentives offered to first time buyers. Comparisons online can also give you ratings on service as well as costs and interest rates.
You are more likely to have to pay a penalty or exiting fees if your existing mortgage is discounted or fixed as your lender will have offered these deals initially on the basis of you being with them for a longer term. You will also have mortgage arrangement fees to consider for a new mortgage if you opt to go with a different lender so you will need to weigh up the benefits of moving with the costs involved. Make sure you shop around and it is always a good idea to speak directly with the mortgage providers as they may be able to do you a better deal. You can also get independent advice from various sources online and on the high street, which will help you make the right decision and secure the best deal.
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