Porting & Newbuild

taylor86

Hi all,

I am currently not far into a 5 year fix mortgage with a redemption fee of 5%, around 6.5k. Circumstances have adjusted and we are now considering a new build for various reasons. I am with Halifax and my paperwork tells me I can port my mortgage however if I don’t complete the sale and purchase simultaneously I have to pay redemption fee then will get this back if I purchase again within 12 weeks.

Does anyone know how this works when a new build is bought off plan and could be 6 months between sale & purchase? Would we lose the redemption fee?

I don’t want to invest too much time in this if I will def lose the 6k.

Thanks in advance!

Sparklesandmoresparkles

Is part exchange a possibility? We’re in a very similar position and looking at part exchange as an option.

taylor86

It’s not for us as the values are quite similar that we are selling and buying for.

Sparklesandmoresparkles

Ah ok, that’s a shame then. I’m afraid I can’t advise, as this is the first time we’ve even considered a new build so we’re in new territory too.

Hopefully someone wiser than me will be along to help out. Good luck!

taylor86

Thanks for the suggestion!

AdrianC

taylor86 wrote: »

my paperwork tells me I can port my mortgage however if I don’t complete the sale and purchase simultaneously I have to pay redemption fee then will get this back if I purchase again within 12 weeks.

Does anyone know how this works when a new build is bought off plan and could be 6 months between sale & purchase?

I assume by "6 months between sale and purchase" that you're completing the sale on the old place, and moving into rented for six months before the new place is ready for completion?

So you'll redeem the old mortgage on completion of the place you sell... and get the fee returned if you take a new mortgage on completion of the purchase within 12 weeks.

Over 12 weeks, you won't.

Or are you getting confused between agreeing an offer and "sale"? The relevant dates are completion.

taylor86

Yes exactly that, moving into rented or with parents for 6 months after completion of current property while we wait to complete on the new place.

I’m wondering if I these cases an extension can be granted or if this 12 weeks is the max. I presumed it was a common situation and am hoping there’s an easy fix!

AdrianC

The gap is entirely down to your choice, and that long a gap before buying a new build wouldn't be normal.

So while you might be able to persuade the lender to make an exception to their normal process, I suspect you'd be lucky - and, of course, there's no way to know for sure until you apply for that mortgage.

taylor86

Thanks for your comment. From looking around at different sites it seems that a 6 month gap from exchange to completion is quite standard when buying a new build. All the sites we’ve been to are selling well and releasing plots far in advance.

I’ll have to speak to a mortgage advisor I think and get some clarity.

AdrianC

taylor86 wrote: »

Thanks for your comment. From looking around at different sites it seems that a 6 month gap from exchange to completion is quite standard when buying a new build.

Indeed, depending on when in the build process you buy. If you buy early off-plan, then it certainly can be.

But you don't need to complete on your sale that early.

kingstreet

From completion of the sale and repayment of the existing mortgage (and the ERC) Halifax allows you three months to apply for a new mortgage for the purchase of your new home, then it refunds the ERC.

If you don't do that, the ERC is lost.

Where a customer sells their property and repays their existing mortgage before they complete on a new purchase, they will incur any Early Repayment Charges that apply. However, if they apply for a new mortgage with us within three months of repaying their existing mortgage, while they cannot port and would choose a new product from the current range at that time, once the new mortgage has started they will receive a refund of the Early Repayment Charge. This is a concession and it may not always be available.