Gap in Completing on old house and moving into New

jasmin10

I will be completing on my current house and living in temporary accommodation as the completion on my new house has hit delays. There will probably be about a two month gap between the two.

My question is, what will happen to our mortgage. I am currently tied into my mortgage for two years (which I don't mind), our bank has send as long as we borrow the same amount or more we won't pay redemption penalties. Not a problem I thought. When I move out of my current address I will just carry on paying it even though I'm not living at either or the addresses.

I have been sat here thinking though when we complete on my current house the mortgage would normally cease and go straight over to the new house. Surely though our bank wouldn't let us have the mortgage and pay for a house that we haven't completed on.

So my question is what will happen? The only thing I can think is that they will ask us to pay off the current mortgage and then begin the new one when we move in - surely this will incur the penalties??

Anyone been in this position before???

Doozergirl

they will often give you up to about a three month break to complete on a new property if you ask them nicely.

david29dpo

As you are porting the mortgage, the most likely thing that will happen is you redeem your old mortgage, paying the redemption penalty and take out the new when the new house is ready and they will pay back the redemption penalty.

Richard_Webster

As you are porting the mortgage, the most likely thing that will happen is you redeem your old mortgage, paying the redemption penalty and take out the new when the new house is ready and they will pay back the redemption penalty.

Basically that is right, but you will need to check the precise terms with your lender. Sometimes they only refund part of the penalty depending on the length of the gap. Some lenders only make the refund if you ask them beforehand, so it pays to be completely clear as to how they deal with it.

Another trap is that I have known lenders only to make the refund after you have made the first mortgage payment on the new mortgage - so you do not have the use of the "extra" money when you complete your purchase. Whatever happens you will have to pay the penalty on completion of your sale because your mortgage will be paid off at that time - there is no way it will carry on in the intervening period.

bazza1603

Hi,

Anyone know HSBC policy on this? I was thinking of renting for a few months until we found a property we like, but my wifes due a baby in Feb so its a bit pushed to move twice before Feb.

Thanks

Baz

sledgehammer_2

We were thinking about taking a gap between selling our house and moving 330 miles away to Suffolk where my family live.

Would it all go wrong if we didn't have jobs lined up in Suffolk? Would it make it harder to start the new mortgage again? I'm guessing it would, as we'd have no proof of income.

Any ideas?

Great website by the way. Very helpful.