ERC - To be paid even if selling/buying + porting application at same time?!?

itssmallstuff

So, I just learned that I'd need to pay ERC even if my mortgage is being ported and I'm selling/buying on the same day....?!?!

And that the bank will refund the ERC to the account mortgage EMI is taken from....

Only issue is, I don't have excess amount to pay the ERC and await for refund...

Is that how it works?!?!

user1977

How porting works depends on the lender. So...who is "the bank"? 

itssmallstuff

user1977 said:

How porting works depends on the lender. So...who is "the bank"? 

HSBC fixed rate mortgage 

Noneforit999

You have no additional funds whatsoever from the sale?

You have no savings at all?

All lenders do the ERC thing differently but this is something you should have asked about well before exchange/completion.

K_S

@itssmallstuff Usually if the sale+purchase is happening the same day then the ERC would be waived. The solicitor needs to let HSBC know that the completion on both transactions is simultaneous so they can waive that rather than you needing to pay it and then for HSBC to refund it.

This is off of the top of my head but I would definitely point this out to the solicitors and ask for them to confirm.

TBagpuss

IT's up to the bank how they do it. They are normally entitled to the ERC even if you are porting the mortgage, but normally have the discretion to waive it. technically you are repaying one mortgage and taking out a new one, so if they chose to do it as you repaying one then getting a refund on the next then that's up to them.
Have you asked about how quickly this happens and whether there is any flexibility on their end? 

How much is the ERC, and how close to your planned completion date are / Have you already exchanged? 

itssmallstuff

TBagpuss said:

IT's up to the bank how they do it. They are normally entitled to the ERC even if you are porting the mortgage, but normally have the discretion to waive it. technically you are repaying one mortgage and taking out a new one, so if they chose to do it as you repaying one then getting a refund on the next then that's up to them.
Have you asked about how quickly this happens and whether there is any flexibility on their end? 

How much is the ERC, and how close to your planned completion date are / Have you already exchanged? 

Exchanged - yes

Completing -13th April

It's sorted now. HSBC will auto adjust

warwick2001

This has just happened to me.

I ended up paying the ERC when the transaction went through, but then I was refunded the ERC about 3/4 days after the transactions had completed as I shouldn't have paid it, as, like you, I ported across my mortgage to my new purchase.

eddddy

itssmallstuff said:

Exchanged - yes

Completing -13th April

It's sorted now. HSBC will auto adjust

If that's what HSBC have told you (maybe by phone), make sure your solicitor knows and agrees as well.

I guess your solicitor will need formal notification direct from HSBC. If you wait until completion day to find out that your solicitor hasn't received the notification (or can't find the notification), things could get difficult.

itssmallstuff

eddddy said:

itssmallstuff said:

Exchanged - yes

Completing -13th April

It's sorted now. HSBC will auto adjust

If that's what HSBC have told you (maybe by phone), make sure your solicitor knows and agrees as well.

I guess your solicitor will need formal notification direct from HSBC. If you wait until completion day to find out that your solicitor hasn't received the notification (or can't find the notification), things could get difficult.

Mortgage advisor and solicitors spoke to one another. Then solicitor called HSBC and got that confirmed somehow

K_S

itssmallstuff said:

eddddy said:

itssmallstuff said:

Exchanged - yes

Completing -13th April

It's sorted now. HSBC will auto adjust

If that's what HSBC have told you (maybe by phone), make sure your solicitor knows and agrees as well.

I guess your solicitor will need formal notification direct from HSBC. If you wait until completion day to find out that your solicitor hasn't received the notification (or can't find the notification), things could get difficult.

Mortgage advisor and solicitors spoke to one another. Then solicitor called HSBC and got that confirmed somehow

@itssmallstuff Happy to hear that you got a result, a waiving of the ERC is what usually happens with simultaneous completion.