Understanding the portable mortgage
A portable mortgage is one option that is lease explained and understood.
07:28 26 December 2013
Many people look at a portable mortgage and think that it might be a good idea. Unfortunately, it might not be as portable as you might think. Portable products mean that you have the ability to move your mortgage when you move locations. There are a few conditions however, and most people do not realise that by picking this particular product might not be as great as it sounds.
- Qualifications – In order to move the mortgage from one location to another you have to qualify for it. This means that if you were making £100,000 when you were first approved and now you make £75,000, you might not qualify. If you do not meet the criteria then the portable mortgage becomes less convenient and more of a detriment.
- Early pay off- some mortgage options include allowing you to pay the entire balance off, or pay more of the balance off when you have the available funds. Unfortunately, many times there is a fee called an early repayment penalty that is imposed if you attempt to do this. This applies to selling a property. When a home is sold, the money is used to pay off the existing mortgage. Using a portable lending option means that you have the ability to move the remaining balance to a new location.
These are just two of the potential issues that may come up when you are attempting to port a mortgage. Each lending institution has their own set of criteria. It is important if you are going to choose this type of lending option for your home that you know what the criteria for your institution is and that you are reasonably sure you will continue to meet this criteria for the life of your mortgage.