Keeping Mortgage in between houses

aaronb74

Hi all, I'm after a little bit of advice about my mortgage. Apologies in advance for the long post...

I currently live in Scotland, but I'm having to relocate to England for work. I'll need to sell my house, and will probably buy another down south, rather than renting. The problem I have is that I'm still in the first three years of my mortgage, with an early repayment charge that would be around £2,500. I'd ideally like to transfer my mortgage rather than pay this fee (I'm allowed to claim relocation expenses, but there is a limit). However, although my house went on the market yesterday and my first viewer was today, I feel like I haven't really started looking "properly" for a new house. It has felt like slightly more than browsing, but I haven't made any solid decisions about particular areas, or even a concrete budget. I know I should get my act together but the whole thing has happened rather fast.

Anyway, my question is whether it's possible to keep a mortgage going after selling one house, but before buying another and transferring it. Can this be done, or does it need to be transferred directly from one house to another? This is my first house, so it wasn't an issue when buying before. My mortgage is with Nationwide and I wondered if they allowed this sort of thing, if perhaps the funds from the sale were kept in one of their accounts as a sort of safeguard against me scarpering and not paying the mortgage off. This would give me a little more time to find a suitable new place (I can live with family in the meantime), but I'm not sure it's possible.

I'll give Nationwide a call in the morning, but I'm curious to see if anyone on here can shed any light on the matter first.

I should mention that the relocation allowance is quite reasonable, but the £2.5k ERC (plus cost of a new mortgage) might push me over the limit by about £1,000, so I'd rather not do that if I could help it.

Sorry if this sounds daft, and thanks in advance for any advice

holly_hobby

There is no such thing as a daft question when you need advice ...

Unfortunatley you won't be able do this - what you would be best doing, is delaying completion of your sale until you find a replacement property, and then simply porting over your existing deal (if you continue to meet the lenders criteria for this & any additional lending), to your new property on completion of your sale and new purchase.

If you are not able to do this, your lender may agree to refund part or all of any early redemption penalty if you complete on your new property pch within a short time of your earlier redemption. (subject to terms)

Have a chat with your lender to sound out if they would do this and within what time frame - then you will have all your options

Hope this helps

Holly

kingstreet

Your mortgage rate may be portable.

That means you escape the early repayment penalty by taking out a new Nationwide mortgage on a new property and at the point you complete the sale of the old one and the purchase of the new one, the mortgage rate is transferred to the new mortgage.

If you are borrowing more, the rate will be transferred to the first part of your new mortgage, with any extra borrowing being offered on whatever rate you choose from Nationwide. If the mortgage amount will fall, you'll have to pay a proportionate penalty on the amount being repaid.

I wouldn't worry too much about where you're planning on moving to, just yet. Concentrate on getting an acceptable buyer for your current home for the time being.

aaronb74

Thanks folks. To be honest, I thought it was a long shot. I'll speak to Nationwide tomorrow and try to work out the best solution...