help mortgage advise needed please ......

lauranurse

I need some advise. I have just had my flat valued and have been offered a good price for it. The only thing i am worried about is that i have a fixed rate mortgage until 2008 does anyone have any idea what amount of fees i am likely to have to pay for paying off my mortgage.

Am going to ring the mortgage company tomorrow to see what they say but just wanted to know what to expect and where i stand.

Any advise would be very helpful.

miaxmia

If you are buying another property, some Companies will allow you to transfer your existing fixed rate mortgage and then have a separate part to your mortgage for the new loan.

herbiesjp

Does anywhere in your mortgage ffer letter state what redemption penalties what be charged and up until what date - i.e. normally worded something along the lines of 5% until 03/05/2008

As has rightly been said, if you are moving you can port the same amount of money onto the new property and avoid the fee

lauranurse

Hey thanks guys for your help.

Am not planning on buying somewhere staright after selling so i guess this probably makes it less straight forward.

I am new to all this this was my first property am sad to be selling it

Ian_W

Some lenders will refund the penalty if you get a new mortgage with them within a few months, usually 3-6 months. If this is likely to be the case let them know. Otherwise your solicitor will deduct the penalties from any money due to after the mortgage has been paid off and the sale gone through.

lauranurse

I have rang the bank who my mortgage is with and they have advised me that repaying the mortgage would be subject to an over £4000 charge unless i wait until 2008 which seems a long time a way! I am intending on purchasing again within a few months of selling do you think its worth ringing back and mentioning this?

herbiesjp

lauranurse wrote:

I have rang the bank who my mortgage is with and they have advised me that repaying the mortgage would be subject to an over £4000 charge unless i wait until 2008 which seems a long time a way! I am intending on purchasing again within a few months of selling do you think its worth ringing back and mentioning this?

Definitely - as if your mortgage is portable, you would be able to port the same amount of mortgage to the new property and the lenders should refund the penalty charge - there certain timescales that this has to happen by and will depend on the lender.

lauranurse

well its worth a try if not will have to sit tight til 2008! thanks for your help

lauranurse

The thing is i kind of rushed into buying the property and so my dad is the mortgage guaranter so could have quite a large mortgage more than i can afford really ......... so if i was to buy again would look for something cheaper so then the charge would still stand wouldnt it if i don t use the whole amount of mortgage as before? Sorry am really confused about all this.

homer_j_3

Its OK laura, this is what the forum is for. We like helping confused people, infact if a certain car insurance company hadnt taked the website address, I think we could have got away with https://www.confused.blah.blah

Portability relies on you porting the same loan value to your next property. If you are going to reduce the amount you need to borrow then you will usually be liable for the early repayment charge (erc) on the difference.

So if your mortgage was 100k and your erc is 5% of the balance then you will be liable for 5k

If you were to port to another property and keep 100k borrowing, your erc liability will be 0k.

If you were to port but only have a loan of 60k then you would be liable for 5% on the 40k that you are not borrowing. This would equate to an erc of 2k.

Clearly, you will need to speak to your lender and see what the amounts will be when you have more specific figures etc. I would also confirm that if the guarantor is still required, what you need to do to transfer this accross.

Hope this helps.

lauranurse

Thanks homer-j

That does help am going to ring the bank back now and see what they say if not will just sit tight for now and wait til 2008 its not that long is it????????