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What happens if I move house?
If you are a homeowner with a secured loan that is secured against the equity in your home there are a number of options that may be available to you in the event that you are intending to move house.
The options open to you will depend on a number of factors including the policies of the lender through which you have your secured loan. Options include:
- Repaying the homeowner loan in full out of the equity that you get from the sale of your existing property.
- Taking out a larger mortgage for your new property and repaying the homeowner loan with that, thus transferring the amount that you owe on the homeowner loan to your new mortgage.
- Transferring the homeowner loan to your new property.
The options for repayment of your homeowner loan
If you are planning to move house and have a homeowner loan secured on the property it is important that you first contact your lender to find out what the options are with regards to repayment of your loan, as these can vary from one lender to another. For example, whereas some lenders may allow you to transfer the loan to your new property others may not allow you to do this. Once you have contacted your lender you will have a clearer idea of what your options are.
For many people the easiest and most straightforward solution when moving home is arranging for the homeowner loan to be paid directly from the equity received from the sale of the existing property. This is something that your solicitor will arrange along with repayment of your mortgage balance. However, in order to do this you will, of course, need to have the required level of equity in your home so that both your outstanding mortgage balance and your homeowner loan balance can be cleared. You should make sure that you get an exact figure with regards to how much has to be repaid from your lender.
If you do not have the required level if equity in your existing home or you need to take out a larger mortgage you may be able to transfer the homeowner loan to your new property. This will depend on the lender, as some lenders will allow you to do this whereas others may not. If you are unable to transfer the loan and you do not have the required level of equity in your property you may run into problems.
Another option is to take out a larger mortgage for your new property, and use the excess funds to repay your existing homeowner loan. This means that you can effectively transfer the balance of the homeowner loan to your new mortgage.
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