Selling home - mortgage fixed rate finishes on the 31st of March (Stamp duty holiday) Early Exit Fee 29 January 2021 at 7:04PM edited 29 January 2021 at 8:06PM in Mortgages & endowments 11 replies 351 views

spudgun00

I have recently agreed on a sale of my property. The buyer is obviously going hell for leather to ensure the it fits into the Stamp Duty Holiday, otherwise he'll owe an extra £17k.

However if this was to happen, then I would have to pay an early exit fee of £8500. Even though there is a window of just 24 hours before that 2 year fixed contract finishes on April 1st. I've rung up the bank about this whom a representative is adamant that it's a brick wall and contract is a contract.

From there I rang up a legal property lawyer and she told me that you can get out of this situation.
EDIT: She told me that if its like a 24hour window then that is something you can deal with. "If it was more than that, it's a problem"

So before I decided to spend 1.8k (London prices) on her as a solicitor to deal with the sale, I decided to ring the bank up and confirm that this was the case. The response i got was a firm no, and there was no wiggle room at all.

I proceeded to relay this back to the lawyer who basically said "They have nothing to do with this. Why would you ring them at all?". And now she has gone cold. Am I missing something here?

Thrugelmir

Doesn't appear so. A contract is a contract. 
 The obvious way to avoid the ERC is to port the mortgage to a new property. 

dimbo61

She is charging you £1,800 for her services in selling the property plus of course all the costs involved I doubt she is telling you that you won't have to pay the ERC charges if you exchange/complete before the 31st.
Do you want to lose your buyer ?
How much are you making on the sale ( London price rises over the last few years )
Can you port the mortgage to another property ?

clueless_but_curious

I don't see how you could sell the property while still having a mortgage on it, which is effectively what the London solicitor suggests.  The charge needs to be released by your current bank to enable the buyer's bank to secure a new charge and subsequently lend.
In terms of your contract with the solicitor, if the engagement letter does not include anything you have described, you have no way out

spudgun00

The offer was unexpected. Would love to port the mortgage, but in order to do so, we'd have to exchange before the 31st of March deadline. All the exchanges have to happen on the same day. And that is becoming highly unlikely (and we don't even have a property in mind yet - could get lucky over the weekend!)

davidmcn

spudgun00 said:

Would love to port the mortgage, but in order to do so, we'd have to exchange before the 31st of March deadline. All the exchanges have to happen on the same day.

Surely it's the completion dates which are relevant rather than exchange? Admittedly simultaneous exchange and completion is pretty commonplace at the moment.

spudgun00

pudgun00 said:

Would love to port the mortgage, but in order to do so, we'd have to exchange before the 31st of March deadline. All the exchanges have to happen on the same day.

Surely it's the completion dates which are relevant rather than exchange? Admittedly simultaneous exchange and completion is pretty commonplace at the moment.

You're quite right it's competition dates which are relevant, my mistake

Thrugelmir

spudgun00 said:

The offer was unexpected. Would love to port the mortgage, but in order to do so, we'd have to exchange before the 31st of March deadline. All the exchanges have to happen on the same day. And that is becoming highly unlikely (and we don't even have a property in mind yet - could get lucky over the weekend!)

Does your lender allow a period of grace in which to port the mortgage, which will subsequently allow you to reclaim the ERC. 

Given that the 31st March is the cut off for the stamp duty holiday. By delaying the sale you might well be offered less for your property. A case of swings and roundabouts. 

spudgun00

Thrugelmir said:

spudgun00 said:

The offer was unexpected. Would love to port the mortgage, but in order to do so, we'd have to exchange before the 31st of March deadline. All the exchanges have to happen on the same day. And that is becoming highly unlikely (and we don't even have a property in mind yet - could get lucky over the weekend!)

Does your lender allow a period of grace in which to port the mortgage, which will subsequently allow you to reclaim the ERC. 

Given that the 31st March is the cut off for the stamp duty holiday. By delaying the sale you might well be offered less for your property. A case of swings and roundabouts. 

It's a good question, and I'll pose it to them tomorrow (hopefully) or Monday morning. Quite right about the roundabout. Could be that the buyer may pull out as well. 

dimbo61

You will not be able to find and buy a property before the 31 of March due to delays.
Thousands of buyers are going to miss this deadline.

IAMIAM

The deadline is now over in my eyes, and lenders are also seeing it that way.
You can see with the sudden increase of opening up higher LTV products and much better rates.
If you are not a quick case or already down the pipeline, I doubt it will complete before 31st March 2021.
In this instance, you do what is right for you. Another buyer will arrive, do not pay the ERC for the buyer to suddenly decide to drop out as well potentially. Do what is right for you ALWAYS.