Home Movers Mortgage
Need a home movers mortgage for your new home? Learn about borrowing limits, the application process, costs, and special deals available to help you move smoothly.
Key Takeaways
- Home mover mortgages are tailored for individuals moving from one property to another, offering solutions to meet the specific needs of second-time buyers, such as lending rules and processes.
- Home movers typically can borrow up to 3.5 times their gross annual income, with a 10% deposit and a maximum Loan-to-Value (LTV) ratio of 90%, requiring substantial savings besides gross income.
- Using mortgage calculators, like Avant Money’s Home Mover Mortgage Calculators, helps estimate potential repayments and mortgage amounts based on financial situations, ensuring a clear picture of affordability before starting the application process.
Home mover mortgages are specifically designed for individuals moving from one property to another, whether you’re upsizing, downsizing, or simply changing locations. These mortgages recognise the unique needs of second-time buyers and provide tailored solutions to meet those needs.
Second-time buyers need to grasp the complexities of home mover mortgages, which include lending rules and processes. Adequate knowledge can facilitate a smoother transition and help dodge potential pitfalls. The goal is more than just securing a loan; it’s about identifying the ideal financial solution for your new home.
How Much Can You Borrow?
One of the first questions on every home mover’s mind is, “How much can I borrow?”
Typically, home movers can borrow up to 3.5 times their gross annual income. This gives a preliminary idea of the budget range for your new property.
Keep in mind, a 10% deposit is usually required, and the maximum Loan-to-Value (LTV) ratio is 90%. This implies that you need substantial savings besides your gross income.
Familiarising yourself with these figures will assist you in setting realistic expectations and organizing your finances effectively.
Calculating Your New Mortgage
To help estimate how much you can afford for a new home, mortgage calculators are invaluable tools. Home Mover Mortgage Calculators, for instance, allow you to quickly estimate potential repayments and mortgage amounts based on your financial situation.
These calculators can provide a detailed breakdown of your monthly repayments and the overall mortgage amount.
By inputting your income, expenditures, and credit rating, you can get a clear picture of what you can afford before you even start the application process. This proactive approach can save you time and prevent disappointment later.
The Home Mover Mortgage Process
Navigating the home mover mortgage process may seem daunting, but breaking it down into manageable steps can make it more approachable. Understanding what price range you can afford is the first step. It’s important to consider your budget before making any decisions. Once you have this figured out, the next step is to submit a mortgage application.
During the application process, you’ll need to provide several documents, including:
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- A Validation Report
- Proof of mortgage protection
- Proof of home insurance
- Life Assurance and Fire Insurance policies
These should all be in place before drawing down the mortgage.
After successful approval, the following steps will be taken:
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- A letter of offer is sent to you and your solicitor.
- Your solicitor will review, agree upon, and sign the letter of offer.
- The solicitor will then draw down the mortgage funds on your behalf.
- The funds will be sent to the seller.
This streamlined process, supported by platforms like Avant Money’s mortgage hub, ensures that you are guided every step of the way.
Costs Involved in Moving Home
Moving home comes with various costs that can add up quickly. One of the significant expenses is the Stamp Duty Land Tax, which in Ireland is 1% for the first €1,000,000 and 2% for any excess over that amount. This tax is paid when transferring property ownership.
Additionally, there are conveyance fees, which are charged by solicitors for handling the legal aspects of the property transfer. These fees can range between €560 to €1,685. A valuation fee, ranging from €170 to €675, is charged by lenders to ensure the property’s value matches the purchase price and the loan amount.
Some costs to consider when moving homes include:
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Surveyor’s fees for property inspections, ranging from €280 to €675
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Estate agent fees, typically between 1% to 3% of the house sale price
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Removal costs averaging around €1,350
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Having a grasp of these costs will enable you to budget more effectively for your home move.
Fixed vs Variable Rate Mortgages
Choosing between a fixed and variable rate mortgage is one of the most critical decisions you’ll make.
Fixed-rate mortgages offer repayment stability by locking in an interest rate for a set period, typically between 3 to 30 years.
On the other hand, variable rate mortgages offer flexibility to switch without penalties in the early years but come with the risk of interest rates fluctuating. They can save you money if interest rates drop but expose you to the risk of rising rates.
A comprehension of these advantages and disadvantages will assist you in selecting the mortgage type most suitable for your financial circumstances and risk tolerance.
Special Mortgage Deals for Home Movers
Home movers can take advantage of several special mortgage deals to make the moving process more financially favorable. Some of these deals include:
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Cashback offers, with some deals providing up to 3% cashback: 2% upfront and an additional 1% after five years.
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Low interest rates for a fixed period of time.
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Flexible repayment options.
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Help with legal fees and other moving costs.
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These special mortgage deals can help home movers save money and make the process of moving more affordable.
Green mortgages, like the Eco Saver Mortgage, offer fixed rates to encourage the purchase of energy-efficient homes.
The Green 4 Year Fixed Rate Mortgage, for instance, provides lower interest rates for homes with high energy ratings. These special deals not only make moving more affordable but also promote environmental sustainability.
Mortgage Protection and Home Insurance
Mortgage protection insurance is crucial as it covers the mortgage if the policyholder dies during the mortgage term. Lenders are legally required to ensure borrowers have this insurance when taking out a mortgage. Not having this insurance can pose significant financial risks.
Shopping around for mortgage protection insurance can result in significant savings. Additionally, three months of free home insurance is offered for new policies starting after April 1st, 2024. Recognising the significance of these insurances can safeguard you and your family from unexpected financial hardships.
Approval in Principle
Approval in Principle is a preliminary agreement with a mortgage lender indicating the amount you can borrow before formally applying. While it’s not an official mortgage offer, it’s a preliminary assessment providing an estimate of how much you can potentially borrow, helping you access credit with more confidence.
Having Approval in Principle can make you a more attractive buyer to sellers, showing that you’re serious and financially prepared. It typically lasts six months, giving you ample time to find the right property. This can streamline the mortgage approval process once you find your desired home.
Tips for Choosing the Best Home Mover Mortgage
When choosing the best home mover mortgage, consider special offers for properties with high energy efficiency, which might come with reduced rates. If you haven’t found a property yet, obtaining a ‘House Hunter’ approval can give you time to search while having a pre-approved mortgage limit.
Comparing options from various lenders can help identify the most suitable choice for your finances. Regardless of whether you stay with your current lender or switch to a new one, ensure you thoroughly examine all accessible mortgage deals and compare mortgage deals to make the best decision.
Can You Keep Your Current Mortgage When Moving?
Mortgage porting allows you to transfer your existing mortgage to a new property, a feature often available in Ireland. This can be beneficial if your current mortgage has favorable terms.
The ‘Tracker for Movers’ option from the Bank of Ireland allows homeowners with a tracker mortgage to retain a tracker rate when moving, under specific conditions. This new tracker rate will be tied to the European Central Bank (ECB) Repo rate until the original mortgage term ends. This option can provide continuity and potentially save money over the long term.
Contacting Mortgage Advisors
Contacting mortgage advisors can greatly simplify the mortgage process. They help navigate the complexities, manage the application process, and coordinate with lenders, solicitors, and estate agents.
Mortgage advisors can offer the following services:
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Conduct a free review to determine how much additional borrowing capacity you have
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Help you find the most appropriate mortgage deal that aligns with your requirements
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Minimize the stress and hassle associated with the mortgage process
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Leveraging their expertise can help you find the most appropriate mortgage arrangement while minimizing the associated stress and hassle.
Summary
Understanding home mover mortgages involves knowing how much you can borrow, calculating your new mortgage, and navigating the mortgage process. Fixed vs variable rate mortgages, special deals, and the importance of mortgage protection and home insurance are also crucial aspects.
By following the tips and advice provided, you can make informed decisions and ease the transition into your new home. With the right knowledge and support, moving home can be a smooth and rewarding experience.
Frequently Asked Questions
What is a home mover mortgage?
How much can I borrow for a home mover mortgage?
What are the key steps in the home mover mortgage process?
What are the costs involved in moving home?
Can I keep my current mortgage when moving?
Get in Touch
Call or contact NPFS Advisors Limited to organise a no obligation financial review.