Early Repayment Charge & Porting

Tearful1

Hi,

We are porting our existing mortgage (and increasing) to a new property. We have been told by the lender no ERC's apply. We will be completing the sale and purchase on the same day. The solicitor has provided me with the statement of how much is needed to pay off our existing mortgage, which includes an ERC.

I need to know the logistics of the ERC. Do we have to find the extra money for the ERC(£3900) and provide the solicitor with this and then have it refunded to us at some point, or is it immediately refunded and therefore we never have to actually find the extra money to give to the solicitor? It has confused me on how it will work.

Many thanks

P.S The mortgage company is The Woolwich if that is any help?

kingstreet

The lender needs to issue a revised redemption statement which confirms the ERP isn't payable, unless it's one of those lenders where you pay the ERP and claim it back afterwards.

Speak to the lender and find out what it does.

Lister_2

I would query it with your solicitor. Maybe they have just requested a redemption figure which would include the ERC.

I've never had to pay an ERC when porting a mortgage, refunded or not.

KennyH1

Query it.

If not then write a letter to them. I had 90days to complete on a new property after the sale of my house but the house we were buying wasnt available until after the 90days. I wrote to the bank (Natwest) and explained the situation and they gave me an extra month. I know this is very unusual and even when I spoke to Natwest call centres they all admitted they'd never seen the bank extend before but its worth a letter.

Richard_Webster

We are porting our existing mortgage (and increasing) to a new property. We have been told by the lender no ERC's apply.

You may have been told but the lender probably hasn't told your solicitor!

Solicitor cannot rely on what you say, otherwise he could be seriously out of pocket as he has to give a personal undertaking to the buyer's solicitor to discharge your mortgage and the bottom line is that if the lender says it has not had enough money then if your solicitor cannot get the money from you then he has to pay up.

If my client tells me that he is porting then when I ask for a redemption figure for his mortgage I tell the lender that the client is taking out a new mortgage and quote the address and the new mortgage account number and I ask if that means that no early repayment penalty will be required.

In some cases I do not need to ask the question because the new mortgage offer makes it 100% clear that the loan or part of it carries across the terms of a specific present mortgage account on a specific property and that a penalty is not then payable, but most lenders are not as helpful as this.

However even with the extra paragraph in my letters, it is often the case that the point is ignored or frustratingly I am told that if the loan is on the same terms as a previous one then the penalty is not payable. I then have to write a very cross letter to the lender telling them to stop wasting my time - they know whether it is on the same terms or not - I don't and that is what I am asking them - so will they please give me a sensible answer??!!

So please understand that this whole business is incredibly frustrating for solicitors mainly because lenders mostly will not make things clear in writing to us solicitors, whatever their people in branch offices tell the lay client