What Porting a Mortgage means for my Conveyancing Transaction
Reasons to choose Wilson Browne
“Porting a Mortgage” is a phrase that is becoming increasingly commonplace within conveyancing transactions, but many clients find that they have not been made aware of what this means, and the implications that it can have on your conveyancing transaction in practice.
Porting a mortgage is a process that allows homeowners to transfer an existing mortgage product to a new property. This essentially means that the product terms and conditions of a homeowner’s existing mortgage are replicated in their new mortgage offer.
This can often be misconstrued, with many homeowners mistakenly thinking that their existing mortgage will automatically transfer over to their new property on completion – if only it was that simple!
How porting works
Clients porting their mortgages are generally selling one property, to purchase their new home. Therefore, we need to look at how this works in practice: –
Sale of Existing Property
At the outset of your sale transaction, you will be asked by your conveyancer to provide details of your existing mortgage account. This will enable your conveyancer to request a mortgage redemption figure – detailing the amount that will need to be repaid to your Lender on completion of the sale.
This is where many homeowners looking to port their mortgage can often get confused – with many under the impression that no repayment of the existing mortgage will occur. This is not the case.
Your existing mortgage will be secured by way of a charge registered against the title to your sale property. Your conveyancer has to confirm to your buyer’s conveyancer that the charge over your sale property will be removed on completion; your Lender will only do this once they have received full payment of the balance owed under the charge.
Following repayment, your Lender will then release their charge over the sale property.
Purchase of New Property
Likewise, at the outset of your purchase transaction, you will be asked to provide your conveyancer with details of your new mortgage – your conveyancer can then keep a lookout for your mortgage offer arriving.
Your new mortgage offer will contain details of the existing product terms that are being ported across. You will receive a copy of your offer direct – you will also receive a copy along with your mortgage report, once this has been reviewed by your conveyancer.
Practically, before completion, your conveyancer will request your mortgage advance – your Lender will then send those funds to your conveyancer in readiness for these to be sent on to your seller’s solicitor on completion day.
Porting can sometimes mean that any Early Repayment Charges in respect of your existing mortgage product can be waived on completion – your conveyancer will be able to confirm this to you after reviewing both the redemption figure on your sale and your mortgage offer on your purchase.
It’s important to note that each Lender will have its own individual requirements for clients to satisfy in relation to porting – and any queries you may have about the intricacies of such requirements are best addressed with your mortgage broker or financial advisor.
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Posted:
Chloe Lake
Trainee Solicitor
She assists senior fee earners on a wide range of legal matters from land acquisitions and developments as well as business leases, sales and purchases, lease renewals and extensions, through to larger commercial property and land transactions.