You’ve spotted a house that ticks all the boxes. It’s in a great neighbourhood, beautifully decorated and at a great price. Everything is looking good.
But you already have a mortgage on your existing house, and it’s locked in for another two years.
What can you do?
This is not an uncommon scenario. Many people fix their mortgages as a matter of course each time they come up for renewal, either before they know they’re going to be moving soon – or when the possibility seems so distant that it doesn’t really matter.
With fixed rates so much lower than floating, it makes sense. But fixing can complicate things if you want to make a major life change, like selling your house and move elsewhere.
The good news is, there are ways to move and take your mortgage with you.
Transfer the security
If you’re going to need as much of a loan as you had before, you may be able to transfer the security from one house to the next. This is usually a straightforward process, if settlement of the sale and purchase happens on the same day. In that case, the lender just swaps out the house they secure your lending against.
It gets a bit trickier if you have some downtime in between selling your house and buying another.
If you sell first, for example, you may be able to put the money in an account with the lender or leave it in your solicitor’s trust account in between the two settlement days. Then, the lender puts the loans back in place when the new house is purchased.
On the other hand, if you buy first and then sell, you may need bridging finance. Used properly, bridging finance can give you time to plan, taking the pressure off selling in a hurry. But it can also be a complicated form of finance, so make sure you get expert advice to avoid any catches. Our Mortgage Link advisers are here to help.
What if you need to borrow more?
Provided you meet the lender’s criteria, you can usually take out another loan on top of the loan you transfer. This would make up the difference between your existing borrowing and the new purchase price.
We can help
Buying and selling houses can be a stressful experience but we can help to ensure that the finance side runs smoothly. Get in touch today to discuss your plans and the best way to achieve them.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.