Early Redemption Penalty

helphelphelphelp

I have had an offer on my house and have been looking at new properties. I currently have a 125k mortgage on a discounted rate which expires in Feb of next year. I applied to my current lender to port my mortgage over but only need £59k this time so was expecting to pay the ERP on the balance. However, I have been declined the mortgage and have had to go elsewhere. The reason given was affordability as I am on maternity leave. However, when I said I could get a letter from my employer saying I am going back to work in January, they said they still could not lend me the money as they would class this as irrresponsible lending as it was forcing me back to work.

So now I have to pay the ERP on the whole amount. Has anyone ever had any luck negotiating this? I just find it annoying that they decline the mortgage (even though they trust me with double that amount of money at the moment!) and also that there is only a month or so left on the loan. We have to exchange and complete on this as soon as possible as our buyers want to be in as soon as.

Thanks

Cannon_Fodder

What buyers want may be irrelevant, depending on the complexities of the chain, lenders and solicitors efficiency etc etc.

If they insist on pushing on dates, ask them to share the cost of the ERC.

If they decline to do so, perhaps they will then appreciate what a lot of money it is and that it is an unnecessary expense for the sake of a handful of weeks.

If the survey hasn't happened yet, exchange is likely to be after New Year at the earliest.

Likelihood is that the paperwork will take longer than everyone thinks anyway. It usually does.

dunstonh

Has anyone ever had any luck negotiating this?

Not with mainstream lenders and even the sub prime ones that wanted shot of high risk borrowers have stopped now.

We have to exchange and complete on this as soon as possible as our buyers want to be in as soon as.

Tough. Tell them you cant move for another month. Or they can pay your ERC if they want you out quicker.