Completion and purchase not quite on the same day

Craig_B_2

I have been eagerly digesting advice from the forums for sometime but need a little bit of specific advice.

We have sold our home (exchange should be this week) its gone through very quickly as first time buyers are very keen. So we have only just found a property - which causes some problems as we are working towards a completion date in 4 weeks time.

There is a really high nearly £6000 fee for ERC so we are pushing through purchase but concerned that the completion and purchase will not happen at the same time (offer only just accepted). Is there any period of grace as there used to be or does it 'have' to happen on the same day?

On discussions with our lender (Nationwide) they inform me there is nothing they can do, when I spoke to an impartial mortgage adviser they gave the impression there could be 30 days after to complete (If I payed them for arranging my mortgage). I am finding it hard to believe as every time I contact the call center I get a slightly different answer as to what and how I can port my current mortgage and I'm aware that they are set to profit from not providing a period of grace.

Is there anything I can do or do I loose my current mortgage deal, cough up the ERC and start a new mortgage as the only option?

Advice much apprenticed!

kingstreet

So what you are actually saying is that the completion of your sale and the completion of your purchase will not be simultaneous?

Nationwide used to allow non-simultaneous ports with upto a three month gap, IIRC, but I'm not sure if this is still allowed.

The only way you are going to get this confirmed is by speaking to the lender.

I've just spoken to Group Intermediary Sales Support and they have told me the mortgage offer for the purchase will last for upto six months from the date of its issue. If you sell, whatever time is left on the offer will determine how long you can go before the purchase completes. You need to ensure you have a mortgage offer for the purchase before you allow the sale to complete. The account must be "live" at the time the offer is issued.

When the sale completes, the ERP will be payable and when you complete the purchase, the ERP will be refunded.

I have no evidence or experience to back this up, only what I've been told on the phone, so treat this as questionable until you can verify it yourself.

kingstreet

If you sell your current property first, where are you going to live until the new purchase is completed?

mrsmchapman

We have just had this same situation, we had to pay the early fee of £4.5k as we couldn't tie up the two completions. Natwest did state that should we complete within 3 months they would refund the early fee, I assumed back onto the mortgage not in our pocket. Anyhow as it turns out its actually done us a favour as the deal we've got for the new house (due to exchange this week) is actually better than the deal Natwest were offering us and so we will gain back what we lost over the 5 year new fixed mortgage.

You will have to pay the early charge if the two completions aren't on the same day.

Tancred

Seems to prove that mortgages with early redemption fees should be avoided.

thelem

Have you already exchanged, or can you push back the completion on your sale? Offer to completion in 4 weeks is possible, but make sure your conveyancers know your timescales and you push them hard (hopefully you're able to visit them easily so you can pick up / deliver everything by hand rather than needing to wait for the postman).

I'm currently on a 4 year deal with an ERC that when I signed it I naively assumed only applied if I wanted to switch lenders (similar to a utility contract). I never considered what would happen if I wanted to sell during the fixed term, and this was not something my mortgage broker mentioned when we were discussing the merits of various fix lengths. I'm not planning to sell before my fixed term is up, but I will be wary of longer fixed deals in the future.

seriousDFW

Tancred wrote: »

Seems to prove that mortgages with early redemption fees should be avoided.

Not really - in some (lots of) circumstances the downside of ERCs is balanced by something advantageous (e.g. fixed payments).