When you sell your property that already has an existing mortgage there are some things that you need to take into consideration first. You can either port your current mortgage on to a new property, essentially transferring it from one home to another, or you can apply for a new mortgage altogether. There is a difference in costs when choosing one of these two options, and here at Charles & Derby we can assist with making that decision thanks to our specialist in-house mortgage advisors who know the industry inside out.
The first thing to know is that you can sell your property at any point even if you have an existing mortgage if you are able to afford the costs. You also have the option to redeem fully your existing mortgage and not purchase another, however you need to ensure that you sell your home for a higher price than the existing amount on your current loan. In some selling cases, due to negative equity, it may not be prudent or viable monetarily for you to sell your home – thankfully this does not occur often.
You need to check your current mortgage terms and conditions to see what you are and are not allowed to do with your mortgage. Financial penalties and costs you haven’t considered can be brought into play when trying to sell a home with an existing mortgage, and we are here to guide you through that process. There may even be a charge for repaying a mortgage earlier than expected.
The vast majority of the time, existing mortgages are fully redeemed when a property is sold, and your solicitor can make contact with the mortgage provider to repay any amounts which are outstanding once the sale completes. If a new mortgage is required, for example on an onward purchase, that application has to be made again afresh whether you are needing a new mortgage loan or are simply porting the mortgage.