Is Porting Mortgage a Good Idea? Here’s Everything You Need to Know About It
Purchasing your very first house can be exciting. After all, you might have dreamt of this day for so long and finally, you managed to secure a mortgage.
However, for some of us, the impression that this property is going to be our home forever fades away before the average loan term of 25 years is even over.
Perhaps you’ll come across a better home or you need to relocate for work purposes, but at the same time, you happen to be content with your current mortgage deal. But paying off the mortgage on one house shouldn’t make you feel trapped in your choices. Here’s how you can work this out.
Leaving your current home for another one is possible through the process called porting a mortgage, which allows you to transfer your current mortgage to the new property you’re going to buy. Most loans of this kind are portable, although not all, which means you can carry your term to another deal.
As per research, two-thirds of borrowers have no idea what it is, while one of five of those who have heard of it do not opt for it because of the scarcity of information.
In hindsight, it technically means you’re bringing with you your mortgage terms onto a new property, but essentially, it means the existing mortgage will be repaid once the current property is sold.
The loan is then resumed on your new real estate. Because you’re basically transferring the deal, you have the same interest and terms and conditions.
When It’s Best to Port Your Mortgage
According to Yorkshire Building Society senior mortgage manager Chris Irvin, porting a mortgage can help save money if the borrower has a loan with early repayment charges or exit fees.
This is especially true if what they’re getting is cheaper than their current property. This option is also attractive to those who are still early into their mortgage period.
If you have a neat deal with your current lender or an ideal low rate, then this might be a good opportunity for you. Say you have one of the lowest rates on the market, then carrying your mortgage loan to the new property can be beneficial and save you a ton of money.
When NOT to Port a Mortgage
If you are porting your mortgage just to save money but eyeing a more expensive property than your current house, understand that it could prove to be costly and difficult if you don’t do your homework well enough.
In that case, you may need to borrow more money and need to pass affordability checks conducted by your lender who will check how capable you are of paying back your loans on time. Chances are, the extra sum will come with a higher interest rate.
Plus, it is better if you compare your rates to others just to see if your current deal is still the best in the market. If you’ve spotted a lower interest, it might be high time to ditch porting your mortgage and just find another lender. Bear in mind the fees you’re about to face, like exit and valuation charges.
More in Loans & Mortgages
Exploring The World Of Embedded Finance: A Sustainable Business Model
As time goes by, the world is being introduced to new technology, new concepts, and new ideas, which further work to...November 7, 2022
Here’s How You Can Start Investing And Saving When You Don’t Have A Lot
Let’s be honest: investing is a privilege that only a few can do! Most people work to pay their bills and...November 7, 2022
CEOs vs Celebrities: Who Really Makes More Money?
It’s no secret that being a CEO and a celebrity brings in the big bucks. With multimillion-dollar deals and huge payouts,...November 5, 2022
Here’s Justin Bieber and Hailey Baldwin’s Top Choice For Their First Apartment as Newlyweds
After a private wedding in September of 2018, Justin Bieber and Hailey Baldwin are reportedly shopping around Manhattan for their first...October 31, 2022
The Kardashian-Jenner Clan Loves Spoiling Their Kids– Here’s Some of Their Craziest Gifts They’ve Received
When you’re parents, aunts and grandmothers are all extremely wealthy, expect to get spoiled…and we mean really spoiled… The Kardashian-Jenner clan...October 27, 2022
Want to Save More Money While Living a Languish Life? Move into these Affordable Countries!
Most Americans tend to quit their corporate job in their home country, despite the big salaries they have. The reason? It’s...October 25, 2022
5 Money Moves To Make Before Entering Your 40s
Financial freedom is hard to achieve when you are closer to turning 40, but it is more manageable and achievable if...October 16, 2022
4 Successful Investment Tips From Robinhood Users
As you think about putting your money into an investment portfolio, you will have hundreds of thoughts in mind – if...October 11, 2022
Here’s How Travel Advisors Can Boost Their Business Using Social Media
Let’s face it—social media is everywhere and in everyone’s hands. Because it is such an inclusive platform, you’ll find everything for...September 27, 2022