Mortgage Advice - Early Repayment

StanVanDamn

I have a a potential seller for my second house lined up for around the 100,000 mark.

I have 57000 outstanding on mortgage.

If I sell the house before Feb 28 2011 I have to pay 5% early repayment charge and another small fee which comes to around 3000.

Is it possible to sell a house now and continue making mortgage payments until Feb? Then repay the whole mortgage back at that time to save the charge?

Thanks for your help.

GMS

No it isn't possible. When your buyer completes on the purchase their charge will be registered and your lener's charge removed.

At that point you will have completed the mortgage early and the penalty will be due.

Are you buying another property? Can you port your current mortgage?

StanVanDamn

Hi GMS. Thanks for the advice

I am not buying another property. The buyer is hoping to pay cash up front so he will not be having a mortage does this make a difference?

I have a family member who has a house with 0 mortage. Would you say it would be worth moving the mortage onto that and paying it back in February or continue paying the monthly payments and selling it in February?

Just so you know if I continue paying monthly I would have to pay 1400 anyway up until Feb.

GMS

No difference if he pays cash or mortgage, his charge will be lodged and your lender would need to discharge theirs.

If you port the mortgage it means buying another property.

Which lender are you with?

StanVanDamn

My lender is the mortgage works (its been a buy to let property).

What I meant was could I port the mortgage onto my parents property (who have no mortgage at all on their property) and then pay it back in February. That way it will allow me to sell the property now.

GMS

StanVanDamn wrote: »

My lender is the mortgage works (its been a buy to let property).

What I meant was could I port the mortgage onto my parents property (who have no mortgage at all on their property) and then pay it back in February. That way it will allow me to sell the property now.

The mortgage could only be ported to a property you are buying. In theory you could buy from your parents but this could be very complicated. The mortgage is a Buy to Let so any new purchase would also need to be BTL.

Thrugelmir

You'll continue to pay mortgage interest even if the debt (if it was possible) isn't repaid until February.

As you've found a cash buyer, sell now. Another one may not pass by for a while if this one loses interest.