refused port on shared equity

ajwilliams

Hi I bought a new build apartment for 99950 back in march 09, I had it on a shared equity (75/25) I had a 100% mortgage for the 75% on a five year fixed mortgage. The 25% was off set for ten years and then to be added to my 75% or to be paid when property is sold. I now want to sell up and move into another shared equity but this time a house but this time with my partner on the mortgage, my mortgage company is Principality and after speaking to them on the phone they told me I could port my mortgage if mortgage was the same or higher but not less which I thought great :T but now they tell me they cant port my second charge the 25% as they dont offer shared equity anymore.:( If I sell up and get a new mortgage with a different company I have to pay an early repayment charge of around £3500 but as they are stopping me from porting my mortgage to another shared equity is there anything I can do as to not pay this early repayment charge?

Thrugelmir

Porting is at the discretion of the lender, i.e, subject to the terms and conditions at the time of the application of the new mortgage. Not a contractual right. So the ERC is payable.

kingstreet

they tell me they cant port my second charge

How can Principality do this, as they are not the lender?

When you sell this property, the second charge is repayable from the proceeds of the sale. If you sell for £100k, you'll repay the £75k you owe Principality and the £25k you owe the developer/Homebuy Direct/Local Council.

As with any fixed rate, there's a penalty to repay it early.

Portability is included to allow you to move the rate to a new mortgage with that lender to avoid such penalties, provided you satisfy its criteria, affordability and loan to value at that time. If the lender is unwilling to lend to you on the basis it did originally, you have to decide whether to stay in your current home, or pay the penalty to enable you to repay the mortgage and start on your next purchase with a new lender and a clean slate.

Leon_W

I think what the OP is getting at Kingstreet is that the new house they propose buying is also shared equity and as Principality no longer do shared equity the port is not possible to this property. I daresay that if they wanted to port the mortgage to a "normal" property there wouldn't be a problem.

OP. Unfortunately you are a victim of lenders changing criteria and there is no other option than taking a mortgage with a lender that still offers shared equity (not many) and paying the Early Repayment Charge.