Early redemption charge

toffeeman2

Hello,

Being a bit of a novice to the housing market I'd be interested in some advice please; I currently have a buy-to-let mortgage on a house with a redemption penalty until November 2008. I would like to sell the house but not pay the redemption penalty, of course.
I was wondering if it was possible for me to sell the house before November, bank the money and continue paying the monthly mortgage until November before then paying off the mortgage. Is this feasible or would my lender not allow it ? I'm not in a rush to buy another house so I wouldn't need to use the money from the sale towards another house. I can't transfer the mortgage either.

Thanks in advance,
RM

Dan:_4

toffeeman2 wrote: »

Hello,

Being a bit of a novice to the housing market I'd be interested in some advice please; I currently have a buy-to-let mortgage on a house with a redemption penalty until November 2008. I would like to sell the house but not pay the redemption penalty, of course.
I was wondering if it was possible for me to sell the house before November, bank the money and continue paying the monthly mortgage until November before then paying off the mortgage. Is this feasible or would my lender not allow it ? I'm not in a rush to buy another house so I wouldn't need to use the money from the sale towards another house. I can't transfer the mortgage either.

Thanks in advance,
RM

In a word, No. You will need to settle the mortgage upon completion of sale, including the redemption fee if this occurs before November.

neverdespairgirl

toffeeman2 wrote: »

I was wondering if it was possible for me to sell the house before November, bank the money and continue paying the monthly mortgage until November before then paying off the mortgage. Is this feasible or would my lender not allow it ?

They 99.9999% won't allow it.

A mortgage is a loan which is secured against property. If you don't pay up when you should do, they can get a court order to reposses it.

If you sell and the mortgage isn't paid off, they have no asset to grab.

PasturesNew

No.

You were lent the money based on the fact they could take the property back if you stopped paying. So the property cannot be sold unless the mortgage company is being paid off in full right then.

seabiscuit_2

Another way to look at it.

Your mortgage company own your house (minus your deposit and monthly payments paid percentage). Therefore when you sell, you are only selling the difference between what the mortage company own and the sale price, the mortgage is then repaid in full upon completion of the sale and what is left comes back to you from the solictors.

Richard_Webster

Put another way your buyer's solcitors will require the mortgage paid off whether you like it or not - they will certainly not want their client being stuck with your mortgage!