Quick question

bratcatcher

Long and complicated situation which I wont bore you with....

but my question is basically this:

Do/how do a mortgage company know if you have paid off the mortgage of the house you are selling (with a different mortgage company obviously) before completing on the one you are buying with them?

Does that question even make sense?! I mean theoretically could you have 2 mortgages running if the old one wasnt paid off for some reason and the new mortgage company wouldnt know about it? I should say I am not about to do this!!

Comyface

There's usually a condition in the new Mortgage Offer if they require you to pay off your existing mortgage. It's down to your solicitors to make sure the condtions of your mortgage offer are fulfilled when they request the money for the new mortgage.

If the solicitor doesn't fulfil the conditions, it's down to them (and you, probably) and they/you could be sued by the new lender.

My Dad did do this incidentally (but it was circa 1971, before credit ref agencies), he reckons the new mortgage lender didn't ask him if he had any other mortgages so he didn't tell them (hence no condition on the offer), so he was paying two for ages (one which his ex-wife and kids lived in and the other which he lived in).

Robert_Sterling_3

For £3 the Land Registry tell them about any mortgages secured on a house.

bratcatcher

They know we have another house, we havent been dishonest about that. Its just that originally the sale of this house was tied into the purchase of the next, but now it is not and when we mentioned that this was a possibility ages ago they said they would just need a copy of the exchange of contracts to go ahead, but we can't exchange contracts until about 3 days after completion of the new one. They have sent us a mortgage offer in the post today so I cant read it to look at the conditions, but they basically think the sale is tied into the purchase I believe. This mortgage will save us £200 a month so we are obviously looking for a way to make sure we get it!!!!! We can't move the completion date (again, long story).

I guess we were wondering if we could go ahead without telling them and exchange 3 days after, completing 8 days after that and if they would ever know? That sounds really naughty and dishonest which we aren't but the difference in payment will make a huge difference in our life.

Robert_Sterling_3

Could you be dishonest ... Just this once?

Comyface

I don't think they would ever know if you did do it, but I wonder if your solicitor would agree to action it this way. It's him/her after all that could be sued and without exchange there's no guarantee of completion so in those 3 days it could all go belly up (don't wish to be a doom-monger, but it could theoretically happen). Would your solicitor take that risk?

bratcatcher

Well I could!! But will they not know? I'm concerned that they will pull the mortgage or something like that and as we have already exchanged I dont want to risk our deposit. The solicitors want to request it asap as we complete next week.

Is it always in the conditions? and if it is - is it still worth seeing if the solicitor misses it!!! ha ha thats really bad isnt it!!

bratcatcher

Yes of course theoretically there is this risk, we are fairly certain (or as certain as you can be) that it will be ok as we know the lady is desperate for it and has sort of proved it when other small hiccups have occured - put it this way if we werent certain I wouldnt risk it as 2 mortgages - no thanks!!

Comyface

If you have already exchanged on one, then seems like your solicitor has already taken the risk, surely? You're now contracted to the new one but no-one's contracted to buy the old one. Also, completion date is usually set at exchange, are you sure this has happened?

silvercar

If you are happy to take the risk then get your solicitor to draw down the funds a s quickly as looks reasonable. If there is only a few days/ weeks overlap then by the time the mortgage lender did realise what was happening the situation would be legitimised.

On our last move, we lost one house after our mortgage offer had been issued. A couple of months after moving to our new home the lender contacted us to remind us that the mortgage offer on the gazumped house was about to expire. When I phoned them they said that they would have issued both mortgages as there was no condition in the second mortgage offer that required us rejecting of the first offer. So blips do occur.

bratcatcher

Thanks for the advice guys.

No the solicitor didnt take a risk to exchange as we already have a mortgage offer in place, its just that we want a different one (much lover rate) and we had to exchange as the seller was insisting but gave us 5 weeks in order to get the new mortgage which seemed plenty at the time, but the abbey made a !!!! up with our buyers mortgage meaning we cant tie them in. Told you it was complicated eh!

So basically we can exchange as planned, its just with which mortgage company. Obviously we want the lower rate one if at all possible. I think the plan is to send it to the solicitor signed etc and see if he notices :lipsrseal....

Anyone else know if its likely we might get away with it?