David Lock

Sorry in advance for another house move question.

I have an offer for our property so will be moving soon if all goes well. I have a mortgage on the property which I can transfer to the next place. However the small print says that we should complete sale and purchase on the same day or else I may be liable to a fairly hefty penalty as they would consider one mortgage closed and a new one arranged - if you see what I mean

I phoned up the mortgage company and said we had not yet identified a place to buy so may not do a sale and purchase on the same date. So would they allow a grace period to avoid an early repayment redemption penalty? They couldn't tell me on the phone and told me to write to them but it would take a week of two for them to reply.

So has anyone been in a similar position and what happened?

David

njkmrs

I would imagine if you have a good mortgage rate ,which I presume you have, to want to move with it ,they may tell you to do one as they will prefer you to take out a new mortgage at higher rates .
I hope im wrong but I think this is what they will want to happen .

PaulC72

how else can they work? if you do not move onto another property becasue youhave not found another one you must pay off the old mortgage and it will be ended, then when you buy somewhere you will start a new one.

If you move to another property at the same time as selling you port it over as it is linked to the new property and they have something collateral to claim if you default otherwise on the first scenario what stops you from never buying another place thus leaving them out of pocket? and how would they claim the redemption figure from you later on?

I know you probably wouldn't but you could just disapear and get out of paying the fee so what would the point of having the clause in the first place be if you could defer it?

BLU

iTrader: (27)

I'm afraid not, I was in the same boat as you just over 2.5 years ago as we were waiting for our new build to be finished. The Mortgage needs to be moved from your current property to your new one straight away. Any gap means you'll be liable for the early repayment charge. We didn't want to loose our sale (and our buyers weren't prepared to wait 6 months ) so took this charge on the chin, very bitter pill to swallow

Mrfastbaz

my wife works in a remortgage department and she feels that the product you have now is called a ported product and she belives tha they are correct in that you sell and purchase on the same day or it would be classed as a new application on the next property

Steve vRS

The Nationwide were good with us. We sold up, paid of our mortgage and then found another house, re-starting the mortgage. This was after 6 months and 2 weeks. Because we were only just over the 6 months, they still refunded our early repayment fees.

Steve

PaulC72

The answer there being you paid the fee which meant the bank would not lose out if you never took out another mortgage with them (ie did not do what you had said you would) but as you did they refunded which then would make sense as it would then be trasted as a buy/sell transaction.

cookstar

iTrader: (6)

I ported a mortgage recently, by selling completing on my sale and completing on the purchase three weeks later, basically you fully redeem the mortgage and pay any applicable redemption fees out of the proceeds. My lender gave me 6 weeks grace from memory. When you complete on your new purchase the lender will send you a refund cheque for any redemption fees on a pro rata basis.

One thing to watch out for is if your purchase falls through, setting your time scale back by some way you may end up losing any redemption fees payed.

Good luck

hodgy0_2

we had to do something similiar a few years ago when we remortgaged one loan and turned another mortgage into a BTL, it was complicated, but my finance guy managed to do it without incuring any penalties

he said it was all done within a "*** papers width" of breaking the actual rules and certainly broke the spirit of the rules (as set by the Mortgage company)

so I would say it is doable if you get the right advice

David Lock

OK guys, thanks. Mixed views.

I couldn't bugger off without paying back the mortgage as they have the deeds and would be paid as soon as I sold my place.

All I would hope for is a period of grace and we are only looking for places without a chain so we should be able to move quite quickly.

Penalty is £8k so I want to avoid if at all possible - that's several gallons of fuel

David