Moving Home: Is the stock issue transferable?

What happens if you release equity in one home, but need to move to a new home? Will you take your plan with you? Mark Gregory explains it all

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Question

I hope you can advise on a matter related to my mother-in-law. She lives in a three-bedroom house in Hampshire and it is becoming stressful for her, so we are looking to help her downsize to a smaller property closer to me and my husband.

However, there is a hitch, because it got issued shares five years ago. The new property will only cost a fraction of the cost of her current home due to regional house price differences, so while she will downsize to a smaller home, she will not free up any money to pay off the original equity issue.

Please can your expert advise if she can change her plan…? Thank you!

Mark’s answer

Yes – releasing equity does not necessarily prevent your mother-in-law from moving to a more manageable home closer to you. If she has a lifetime mortgage, she may be able to transfer or “roll over” her existing plan to the new property.

The ability to move home is a feature of lifetime mortgages that meet ERC standards, subject to the new property meeting the lender’s criteria and meeting the mortgage conditions. So the starting point is to check her own plan and the property she hopes to buy.

Moving to a smaller house doesn’t automatically mean she has to pay her back Release stock. The lender will evaluate the value of the new property and its suitability as security for the outstanding mortgage. If it is acceptable and supports the full balance, you may be able to transfer the mortgage without reducing the amount owed.

However, even a modest reduction in the value of the property may mean that some repayment is required. A comparable purchase price does not guarantee full mortgage portability, as the type of property and other lending criteria are also important. There may also be valuation, legal and administrative costs in the budget.

Some plans include Downsize protectionwhich may allow the mortgage to be repaid without early repayment fees if the new home does not meet the lender’s criteria. Since your mother-in-law set up her plan five years ago, it’s worth checking if she has this benefit and has reached any qualifying anniversaries. For example, some Lenders release equity The mortgage is required to be held for at least five years. The exact terms will depend on her approval.

Importantly, this protection only addresses early repayment fees: the outstanding loan and any accrued interest will still need to be paid. In the case of your mother-in-law, this may leave insufficient proceeds from the sale to purchase the new home unless other funds are available or suitable alternative borrowing is available. Any new borrowing will require a separate appraisal and could have different rates and terms.

The next best step is to contact your current service provider, with their permission, to confirm the current balance, plan transfer terms, and any costs or reimbursement required. It makes sense to inspect the proposed property as soon as possible, before you commit to purchasing.

that Independent advisor for equity issuance They can then be helped to evaluate whether converting their existing mortgage is appropriate and affordable within their overall moving budget, or whether there is another option that better meets their needs.

Our experienced advisors can review her current plan and explain the options, at no charge for the initial evaluation. You can call your mother-in-law, or you can be there for her 08008021015 Talk directly to an advisor, without obligation.

Meet our expert…

Mark Gregory, Founder and CEO Supermarket stock issuehere to answer your questions. Mark is himself a consultant with over 20 years of equity issuance experience.