Mortgage question...

[The Tea Boy]

Evening all,
The wife and I are looking to put our house on the market shortly.

But we can't find any info on what would happen if we sold our house but couldn't find anywhere new to live.

If we decided to rent for 6-12mths,what would happen to the mortgage?

Thanks in advance,

Matt

[Magic919]

It'll be gone when you sell the house.

[The Tea Boy]

Ok, so what you mean is we would have to pay the early redemption fees etc? And they wouldn't just hold it. So effectively we would have paid off the mortgage and start again with our new deposit?

Matt

[technogogo]

Is the concern that getting a new mortgage after a gap will be harder than transferring the existing mortgage? If so, that's a good question.

[The Tea Boy]

Not really a worry about getting another mortgage, more the work of having to pay a penalty of ££££'s and wasting money on renting if buying something we don't like would work out better financially.

Hope that makes sense?
Ie we sell, decide to rent for a short time until we find a property we like, will the mortgage company hold out monies for us with no penalty and then just carry on as we were when we find the just we like?

Matt

[Evil Monkey]

When you sell your current house the existing loan (mortgage) will be repaid. The lender won't be holding monies for you to port onto a new house - you'll have to apply for a brand new loan once you find a new place, and there's no guarantee that any new loan will be agreed. As for redemption fees, you'll need to pay these when the current loan is redeemed and your lender may refund these if you take out a new loan within a certain timeframe - speak to your lender to see how long this timeframe is.

[Sarnie]

The Tea Boy said:

Not really a worry about getting another mortgage, more the work of having to pay a penalty of ££££'s and wasting money on renting if buying something we don't like would work out better financially.

Hope that makes sense?
Ie we sell, decide to rent for a short time until we find a property we like, will the mortgage company hold out monies for us with no penalty and then just carry on as we were when we find the just we like?

Matt

If you have ERC's then you will want to try to port your mortgage to a new property. Inform your lender of your intention to do this. The lender will give you a grace period of 3-6 months depending on who the lender is, to port the mortgage to a new property. You would have to pay the ERC's on redemption but they would be refunded to you on purchase of the new property, as long as it is within the specified time frame. If you do not complete the onward purchase within the specified time frame then you would not get the ERC's refunded to you.

So if you sell up, the lender will incur your ERC's when you sell up, they won't forego them in case you buy a property in the near future.

[The Tea Boy]

Thanks for that. Makes sense to me.


Matt