Mortgage Comes to End Month after we Move

CC99_2

We have bought a new house and get the keys 5th August, We are in the middle of selling our flat, however it isn't vital that we sell it in time to move. Our 2 year fixed term mortgage ends on 30th September 2016, with our new mortgage starting with a different company on 5th Aug. Our current mortgage lender does not know we are moving yet. Is it us who informs the mortgage company we are moving? And if we sell the flat with a date of mid september, would we still need to pay a fee for leaving (our date of payments of mortgage are 1st of the month) Also if we didnt mention to the mortgage company that we have moved and just phoned up and paid off remainder of mortgage on 1st October, would there be any way that the mortgage company would be told though someone else that we had moved? Im not saying we are going to do this, im just interested in finding out how it works, as we would need to pay an early repayment fee until 30th September. Thanks

amnblog

Speak to your solicitor about this. Unless you exchanged contracts last year, you may find that your stamp duty land tax bill will come as a shock.

MortgageMamma

I thought the stamp duty was refunded if they were selling one main residence to buy another and the previous residence sold within 18 months of the second purchase?


CC99 - you really need to speak to your broker/lender about this, have you established that you have the affordability to run both mortgages simultaneously? what happens if your sale on original property falls through?


Who is dealing with the sale of the 2nd property for you in terms of conveyancing? They will most likely have started the legal work and perhaps already contacted your lender?

amnblog

MortgageMamma wrote: »

I thought the stamp duty was refunded if they were selling one main residence to buy another and the previous residence sold within 18 months of the second purchase?

Still need to find the cash on completion though.

CC99_2

We know what the stamp duty is and have that covered. We are selling one home to move to another, its just that it may overlap a bit if we dont sell in time. We do though have a back up if it doesnt sell to make sure we have money in place to buy the new house (a large loan from family).

We can afford to run both mortgages for a few months and if our sale falls through we could do so for a year if we needed to.

Our lawyer hasn't asked for our mortgage providers details, is it usually them who contacts the mortgage company or would it be us who would contact them to advise of our plans that we are selling. The issue we have is that there is a 3% fee (approx £1500) if we pay off mortgage before 30th September and no charge after this date. If we sell our flat and it goes through a couple of weeks before, its very frustrating that we are stumping out this money! Maybe our best bet is to push the sale back to 1st October?

amnblog

1. You cannot swop from providing your purchase deposit from equity to deposit via a loan without the mortgage company's agreement.

2. Smart move is just move when the erp has lapsed, or will the builder not let you do that?

MortgageMamma

Make sure the lender who you are buying through is happy with a family gifted deposit as you will have to provide proof where the deposit came from. Some lenders can be funny about it.


You really need to speak to your conveyancer about when to redeem the 1st mortgage, he or she may know a way around it with the particular lender or may advise that you hold of until 1st October. Us mortgage brokers don't really get involved in mortgage redemption issues often, once the mortgage offers been issued and the insurances are done we hardly have any involvement at all unless things go badly wrong.

HappyMJ

CC99 wrote: »

We know what the stamp duty is and have that covered. We are selling one home to move to another, its just that it may overlap a bit if we dont sell in time. We do though have a back up if it doesnt sell to make sure we have money in place to buy the new house (a large loan from family).

We can afford to run both mortgages for a few months and if our sale falls through we could do so for a year if we needed to.

Our lawyer hasn't asked for our mortgage providers details, is it usually them who contacts the mortgage company or would it be us who would contact them to advise of our plans that we are selling. The issue we have is that there is a 3% fee (approx £1500) if we pay off mortgage before 30th September and no charge after this date. If we sell our flat and it goes through a couple of weeks before, its very frustrating that we are stumping out this money! Maybe our best bet is to push the sale back to 1st October?

You seem like you're spending pounds to save pennies.

3 months of mortgage payments would cost?
3 months of council tax would cost?
3 months of gas/electricity/water would cost?
3 months of boiler insurance would cost?
3 months of unoccupied buildings insurance would cost?
3 months of visiting the house cleaning, gardening etc would cost?
3 months of interest on the SDLT payment you've made would cost?

I'm sure there's more costs in holding on to an empty property. I'm also quite sure those costs would exceed the £1,500 redemption charge.

CC99_2

Thanks everyone, ill speak to our lawyer and take it from there. I (maybe daftly) totally forgot about all the other charges involved over those months! Its just annoying that we may only have 1 more mortgage payment and then we wouldnt have to pay extra money!

Thrugelmir

CC99 wrote: »

We have bought a new house and get the keys 5th August,

Is this date a certainty?

CC99_2

Yeah. We tried to push it back later but seller wanted earlier, so we agreed in the middle.