Mortgage Dilemma

jockass

Hi all,

My other half and I have a fixed rate mortgage with alliance and Leicester - now part of Santander which we are tied to until Sept 2013. We are looking to move house to a new build and will have to borrow more money to do so. Our current mortgage has an erc of 4% which will cost us £4800 to leave early. We have spoken with Santander about adding a new mortgage to our existing deal which they are happy to do. The difficulty comes in that they need us to move into the new property within 3 months to do this and to avoid the erc. The lead time for the build is 6 months so it looks like we are left with no option but to repay early and suck up the huge erc charge as they can't accommodate the build time of our new house. Does anyone have any suggestions on how we should deal with this? Clearly we would like not to repay the erc but it would appear Santander are so short sighted in their approach to what must be a relatively common issue.

Your help / advice greatfully received
Jock

holly_hobby

Why not just delay your hse sale until you move into your new build (or until you will complete within the lenders quoted3 mth window) ?

H

Dave_Ham

I agree with Holly, this is the only way to make this happen as they will not change their criteria nor buckle on individual cases.

You also need to ensure that you and the new property fits their new, enhanced criteria. They may tell you it is all ok on the phone, then you make a new application and they reject you and force you to suffer the ERC's anyway. Read through some Santander posts on here and you will see some of the issues people are experiencing.

If you have any bad credit within the last 6 years, they will decline you. There are also some strict criteria on the type of new build and LTV that you need to check works..

Some time researching now, may save you some heartache and cash going forward.

Good luck...

getmore4less

Check the builders record of deliveriing on time,

6 months could easly turn into 7,8,9 months.

zxspeccy

As this is a new build wouldn't a small deposit (£500) secure the plot? Also are the builders offering part exchange, some do if the house you are buying is more expensive then the one you are selling.

If this is the case then you could hold tight until the houses are ready to exchange, and easily complete in the three month window.

The downside would be that you would need to re-apply to Santander nearer the time and there is no guarantee the will agree to the remortage at this point, and you would stand to lose your deposit.

The upside is you won't have to pay the erc.

jockass

Thanks all - the new build is in a decent area so there are no incentives on offer. Fortunately we have enough of a deposit to meet santanders ltv criteria. It pains me that they are so rigid in their criteria and would love to tell them where to stick it if it wasn't for the small ransom they have over us - reading the posts on here has been enlightening regarding their behaviour to customers old and new!

Thrugelmir

jockass wrote: »

Thanks all - the new build is in a decent area so there are no incentives on offer.

Being 6 months or more away from completion of the build. The developer won't be in any hurry. Developers start discounting when the build is in progress and there's no sale.

Santander aren't being rigid. You are being zealous.

Do you have to exchange in a given time frame?