When it comes to moving home, there are a vast number of mortgage deals to help you on the next step of the property ladder. To help you make that next step, here is our home mover’s guide to mortgages.
If you have previously owned a home but do not any longer, or have a mortgage at the moment, you may be classed as a second-time buyer if you have started the search for your next home.
It is worth noting that some lenders may view people who haven’t had a mortgage for three years or more as first-time buyers.
To find out how a lender might view your own circumstances, we would recommend speaking with a financial expert. Our in-house experts are experienced in second-time buyer mortgages and can determine what your options might be.
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Deposit requirements for second-time buyers aren’t really any different to first-time buyers. Most lenders will ask you for at least 10% of the property’s value, but putting down more can help you land a superior interest rate and offset any risks the agreement involves.
There are 5 per cent deposit mortgages available to second-time buyers, but you will likely have less product choice than most first-time buyers if you only have this amount, since the Help to Buy scheme is now exclusive to first-time buyers, as are many of the latest 95 per cent loan-to-value (LTV) mortgage products.
That said, some mortgage lenders now offer 95 per cent LTV mortgages for second-time buyers. You may even find that your history of having previously had a mortgage makes it easier for you to secure the deal you want. It can, in fact, be easier due to having a track record of making mortgage payments.
If you are happy with the terms of your current mortgage, you may be able to port it to purchase your next home.
Porting the current mortgage on your old home allows you to apply your current mortgage to your new home. Doing this may mean you can retain your interest rate instead of having to risk-taking on a higher rate.
Although this idea may appear to be a good shortcut to getting things moving faster, you should expect your lender to review your current circumstances to decide whether the option is possible. With many lenders, porting your mortgage is almost the same as making a brand new mortgage application.
Often, it’s only possible to port fixed-rate mortgages. Our in-house mortgage experts are able to check with your lender on your behalf, and efficiently compare this with the rest of the market.
If your lender agrees to port your mortgage, you should expect fees to be applied.
Provided you have enough equity in your current property and you intend to keep your original property, you could consider remortgaging to release equity as a deposit towards your second-time buyer mortgage.
Whether you’re maintaining mortgages for two properties or are increasing the sum you borrow against your mortgage, most lenders will need to be sure you can afford the higher payments from your income alone.
If you want to buy a new property and keep your current property to rent out, a let to buy mortgage might be a good route for you.
It’s important to remember that the bigger your deposit the better the deal you’re likely to receive, but even without a large deposit, you could still find a good deal to suit you.
Mortgage lenders change their offerings regularly so it’s worth talking to an expert advisor who will be able to tell you about the kind of offer currently available that you may be able to benefit from.
If you wish to discuss possible options, why not speak with one of our in-house mortgage advisors?. Our experienced team can help to understand your circumstances and navigate the vast mortgage landscape to find the best deal for you from dozens of high street and niche lenders.
