Difficulty with porting my mortgage 7 January at 12:40AM in Mortgages & endowments 6 replies 445 views

domek

I want to buy a property for £550,000.
I have two properties: property 1 which i am selling for £625,000 and property 2 which i plan on selling for approx £450,000.
When sold and after mortgage costs, i would have £245,000 left from property 1 and £180,000 from property 2.

The plan was that to buy the future house, i would take out a bridging loan of £280,000 (which i would later pay back by selling property 1 and property 2) and port my mortgage from property 2 over to the future house.

However, i am unable to sell property 2 because i am in a 5 year fixed term mortgage (with 4 years remaining) and don't want to pay early redemption fees. I have applied to port my mortgage from property 2 to the future house in July 2022 this was approved. Since then i have found the future house and now my mortgage company has declined to port the mortgage.

I can't seem to figure out another way to be able to buy the future house since, without selling both of my current properties, i wouldn't have the funds to pay back the bridging loan.

Any help or advice would be much appreciated. 

Many thanks. 

mi-key

How much is the ERC? It may be worth swallowing paying it to be able to do what you want. You could always add it on to the new mortgage so it doesnt feel like such a hit.

I am having problems porting mine too. I want to sell and downsize (  currently £340K property with £100K left on mortgage ). Because my provable income has dropped my current lender won't let me port the full amount I am currently borrowing ( and paying fine  ! ) which is £100K. I am self employed so often my taxable income is low because I use money to invest in the business rather than taking it as pay - for example last tax year I bought £60K of stock for the business.

They want to lend me half that amount as a mortgage on the new property, but will then charge me a 10% ERC on the difference because I am in a long term fix !!

I am considering just paying off the whole thing with them including the ERC ( about £10K ) and just going with someone else as they don't seem interested in helping or letting me off the ERC if I stay with them 

ACG

Why wont they allow you to port it? 

domek

ACG said:

Why wont they allow you to port it? 

When I asked they said that it's their decision and they don't need to disclose the reason/s why.

ACG

OK, most lenders do not usually allow you to port to a property you already own - so if for example you bought the property using a bridging loan, they would then not usually allow you to port it to that property. 

But if that is not the reason then I am not sure. 

Porting is an application process, so both you and the property have to be within the lenders criteria/risk profile. Its not a guarantee they will agree it. 

But without knowing the reason for it, it is very difficult to find a way forward. 

Annisele

I don't entirely understand the order you're trying to do this in. I think that what you're saying is that you plan to:

• Sell property 1, and on the same day complete on the purchase of new house. Fund new house with the money you get from the sale of property 1 plus a bridging loan.
• Later on, repay the bridging loan using the proceeds from the sale of property 2.

If that's what you're planning to do, then I'm not hugely surprised that your lender won't let you do it. As ACG says, you can't usually port to a property you already own. By the time you got round to selling property 2 you'd already own the new property, so your lender wouldn't let you port.

Is there any reason you can't sell property 2 first, essentially swapping properties 1 and 2 in my bullet points above? It's possible (but not at all certain) that that might fix the problem.

I also wonder whether your current mortgage on property 2 is residential or BTL? If you're wanting to port from a BTL property to a new property that you're going to live in yourself (or vice versa), I can see lenders not being OK with that.

penners324

You'll need to sell property 2 at the same time as buying property 3 to port the mortgage