Moving in and transfering mortgage?

06jen

Hi all!

Don't know if anyone can help, but any advice would be appreciated. Myself and my partner both own our own houses which are seperatley mortgaged in our own names but both with the same mortgage lender. We want to move into one property, selling the other and transferring the equity into the other property. Trouble is I think this may incurr some hefty early redemption penalties. Sure we're not the only couple in this situation but it all seems quite complicated.

Trying_to_be_good

You may get stung with ERCs on both mortgages - the one you sell (and pay off completely) and the one you move in to (and pay the first house's equity off the mortgage).

No way around this if you're determined to sell the first property - have you though about renting it out?

06jen

I know this sounds daft but if my mortgage is portable, can my partner sell me half of their house - going down the tennants in common line, in order for me to take my mortgage with me? realise this is probably a long shot.

MarkyMarkD

Yes, that's daft.

The ERC is payable on the amount of each mortgage which is paid off, subject to any exceptions (e.g. some exempt £500 a month; some exempt 10% of balance a year, etc).

If you are selling one property and stashing the cash, you will only incur the ERC on one property.

If you sell one property and pay off the other mortgage with the equity, you will incur a partial ERC on the second one too.

As you appear to have ERCs on both, I am guessing that they are both on relatively high fixed rates? If so, then it's almost definitely economically worth paying off the mortgages and the ERC will be less than the interest you save.

If they are on discounted rates, or trackers, but still subject to an ERC it is unlikely that it IS worth paying them off, so the suggestions of renting out one property etc. have more mileage in them.

If you want meaningful suggestions, let us know for each house:

- mortgage o/s
- rate and whether fixed/discounted/tracker and until when
- ERC until when
- value of property

and make it clear which house you want to sell, and if that's a dead cert or whether there are options.

If you know what each house would collect in rent, that's even better!