Can my solicitor pay my mortgage after completion date?

Soozmoney29

Hello! 
We have sold our house and verbally agreed with the buyer to a completion date of the 31st December - that is when he can move out of rented house.  The house is empty at the moment.
Our mortgage term ends on the 31st January 2025 - if we pay off the mortgage on completion, we incur a 2% penalty on the outstanding balance of £172k - we are not purchasing another house so this mortgage will be settled in full.  If the mortgage is paid off on the 1st or 2nd of January 2025, there is no penalty - we have spoken to the mortgage company!
My question is - can we ask the solicitor to hold off paying the mortgage company until the 2nd January so we don't pay this penalty?  Seems rather ridiculous that they would charge us that amount for the sake of 2 days!  
Any ideas please?
Many thanks!

Flugelhorn

ask the solicitor - having sold a few properties it is apparent that money can be slow through the chain and they can miss payment cutof times s on the day of completion. Once I didn't get the balance until the next day but the accounts dept  kept me in the loop, so I knew what was happening  - basically 1st Jan is a bank hol anyway - possible payments won't be made until Jan 2nd ... however are you sure that you don't have to wait until the 31st Jan ?? 

PS once a solicitor paid off my old mortgage by sending them a cheque ... took days (not sure why they did that it was 20 years ago )

SiliconChip

"Verbally agreed" suggests that you haven't exchanged yet, so the simple solution is to delay the completion date until January so that you don't have to pay the penalty. If your buyer still wants to leave their rental on December 31st they can find temporary alternative accommodation for a couple of days, although they could also negotiate with their landlord to stay for a couple more days - I can't see a new tenant is likely to move in on 1st or 2nd January.

Soozmoney29

Thank you!
i will speak to our solicitor… the mortgage company did confirm that full payment was allowed in the final month of the mortgage term. 

Many thanks! 

GDB2222

Doesn’t the whole country go on holiday at that time? I would check whether your solicitor is around then. Plus, removals may be difficult to arrange or very expensive. This sort of thing. It may be much more sensible for your buyers to ask for a couple of weeks extension to their lease. That will help their landlord avoid a lengthy void, too. 

user1977

I wouldn't be planning around a completion on 31 December anyway, lots of law firms are shut between Christmas and New Year (and sometimes a margin either side), even if your solicitor is working it's possible the other side aren't.

And they obviously can't pay the mortgage on 1 January because that's a bank holiday.

EssexHebridean

The solicitor will have to make an undertaking to the buyer's solicitor that they will clear any outstanding mortgage immediately following completion - that is not usually negotiable. 

I agree that December 31st is not a great day for a completion either - so much to go wrong, not least your buyer being left homeless on NYE/New year's day  if things don't go through!

Flugelhorn

GDB2222 said:

Doesn’t the whole country go on holiday at that time? I would check whether your solicitor is around then. Plus, removals may be difficult to arrange or very expensive. This sort of thing. It may be much more sensible for your buyers to ask for a couple of weeks extension to their lease. That will help their landlord avoid a lengthy void, too. 

oh good point - our solicitor used to shut up shop a week before Xmas until after new year , came back on something like 21st Dec to do a completion for us 

removals could be grim to sort 

housebuyer143

As far as I remember, my solicitors as well as many others close over the whole Christmas period, so it's unlikely you will be exchanging 31st December. Mine was closed 22nd December until 2nd Jan and I was led to believe this is industry practice.

EssexHebridean

Yes - pretty standard. Even the firms who used to have a skeleton staff over the period between Xmas & NY are tending not to do that now.  This year our expectation is that the majority will close end of business 23/12 and reopen start of business 2/1 - some may opt for not opening offices on the 23rd as well, though. 

Albermarle

Plus some people seem to take the first few days of January off as well .
Not sure why they take holidays after the Xmas break, in what is usually a miserable time of year, but it was always a noticeably quiet time when I was working.