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Mortgage penalty - is there a way out?
tostaky
Posts: 130 Forumite
Hi, we are selling our property and the current (interest-only) mortgage is expiring in May 2021.
We have not found a place to buy yet but we are actively trying to find something. Our broker said we will have to pay the penalties. Is there any clever way we can avoid to do so? We are with Clydesdale bank if that makes any difference. Thank you!
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Comments
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What penalties will you incur?
Delay completion until June is the obvious answer. There's less than 3 months for you to find a property and for the chain to be in place.0 -
The clever way is to not redeem it before the relevant date.1
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@tostaky The scenario isn't clear from your post. What penalties exactly is the broker talking about? Is it not possible to plan the completion date such that no ERCs are incurred?tostaky said:Hi, we are selling our property and the current (interest-only) mortgage is expiring in May 2021.We have not found a place to buy yet but we are actively trying to find something. Our broker said we will have to pay the penalties. Is there any clever way we can avoid to do so? We are with Clydesdale bank if that makes any difference. Thank you!
I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.
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Sorry, early redemption penalties. Not sure the buyers will want to wait until June!0
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I'd be surprised if they'd even expect to move before June.2
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Have you found somewhere to buy yet?tostaky said:Sorry, early redemption penalties. Not sure the buyers will want to wait until June!0 -
1. There is a porting gap of 6 months between sale completion and purchase 'recompleting' on your next property where the mortgage rate is kept and the ERC is refunded. Does this apply here with this lender?
2. Delay completion for the sale1 -
Thanks Iamiam. I will ask the bank.0
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