What Happens To My Mortgage When I Sell My House UK
Selling your home is a time to get rid of the old and move on with the new. But this means there’s a lot of questions afoot, especially if you have a mortgage on your current property. What happens to your mortgage when you sell your house?
Do You Need A Mortgage To Finance Your Onward Purchase?
In this situation, there are two options. You can either take your current mortgage with you, which is known as ‘porting’ (when you transfer your current mortgage to a new property), or the other option is to apply for a completely new one. Deciding which is the best option requires checking the costs involved in your current deal against a new property with a product, especially if it is with a different lender.
Can I Sell My Home Before The Mortgage Term Is Finished?
You can sell your home at any time, just as long as you can afford it. If you are not buying another property, make sure the sale price is higher than the amount remaining on the mortgage. There can be times when selling it is not a good idea, such as if you are in negative equity due to falling house prices resulting in your home being worth less than it was before you purchased it. Right now, the news of an impending recession may mean there is potentially more supply and little demand.
Will There Be Additional Costs In Redeeming My Mortgage?
Whether buying another home or not, it is likely there will be costs or financial penalties if you want to redeem all or part of your mortgage. Check the terms of your current mortgage with your lender, consulting an independent mortgage broker/financial advisor, or by yourself so you know if there are any costs.
What Happens To My Mortgage When I Sell My House?
In most cases, the mortgage on your existing home is redeemed (paid off) when you sell. The only exception to this rule is when you are ‘porting.’
Do I Need A New Mortgage When Moving House?
If you cannot port your current mortgage, you will have to apply for a new one. The existing mortgage loan is repaid by solicitor or conveyancer once the sale is complete. But if you haven’t been in your current home very long and are still within an initial introductory offer period on your mortgage, you may need to pay an early repayment charge, which is around 3% to 5% of the outstanding loan amount.
Selling your home is a headache, especially when it comes to the terms and conditions around a mortgage, but there are ways around this. It is possible to sell your home before the end of your mortgage term as long as your sale price exceeds the amount left to pay on your mortgage. If you want to take your mortgage to your new home the ability to ‘port’ is on most mortgages. When you have to sell up, either due to necessity or personal circumstances, it’s important to know what happens to the mortgage in every circumstance.