subject: New Obstacles For Moving House [print this page] House prices have crashed, but yet many still think it is a good time to move house. There are bargains to be had, although the value of your home is likely to have nosedived over the past couple of years. If you're thinking of moving home, then you should prepare for three new obstacles which are being put in your way by mortgage lenders.
It may turn out that your current mortgage isn't as 'portable' as you might think it is. In the past you could safely move house halfway through a five-year repayment period, taking the loan with you to the new property and paying the same rate of interest until the original end date.
This was easy to do when house prices were rising, but now lenders are making use of small print in the paperwork which stipulates that loans are only portable if candidates still meet their lending criteria. And the lending criteria has changed quite significantly in the past few years, if you hadn't noticed. If you don't meet the latest desired figures of income debt levels and property valuation then your lender could make it really hard to move.
This could be a difficult obstacle to overcome, so don't make any offers on new homes until your lender has agreed to the move in principle. If they decline, you need to look for a new mortgage from a more flexible loan provider. You will have to pay exit penalty fees on your old mortgage but if you want to move house you simply have no choice.
Loans providers are also much less likely to give credit these days. If, when you got your initial mortgage, you borrowed four or five times your income, you may find that there is no more credit available to you thanks to new lending limits.
These days there are seldom lenders who will offer high amounts of credit based on your salary, and none offer self-certified mortgages any more. Credit card debt or late loan repayments will now count towards your credit-rating and affect the possibility of you obtaining that loan.
It is advisable to clear any outstanding debts if you want to move house, improve your credit rating and avoid any overdrafts or offers of credit.
To add to homeowner's misery, the value of homes are slipping, so you might find you have less equity than you think. Banks are also lending much less of the value of a home, offering up to eighty percent where before ninety-five percent was often available in the past.
