Remortgage but then move house...?

[quackhandle]

My discount rate has come to an end so looking to remortgage, and have a decent LTV and there's a few decent deals around.

However my house is up for sale, so ergo I get new mortgage but sell house, would I get done for early replayment? Some I have seen it is 2% in first year then 1% in second.

Anyone else done this, ie remortgage but sell house soon after?

Thanks

qh

[northernladuk]

Depends if the new product has an early redemption period on it or not. Most do, some don't but it won't be the best of rates.

I can't see why you would remortgage while your house is up for sale. If you sell it part way through the mortgage process it is going to get very complicated indeed. Are you expecting to port it if you did move? Will you be taking another mortgage when you have sold that to buy a new one?

[quackhandle]

Depends if the new product has an early redemption period on it or not. Most do, some don't but it won't be the best of rates.

I can't see why you would remortgage while your house is up for sale. If you sell it part way through the mortgage process it is going to get very complicated indeed. Are you expecting to port it if you did move? Will you be taking another mortgage when you have sold that to buy a new one?

Yes thought has occured to me. Just wondering as I could still have house on the market six months down the line (heaven forbid!) but yeah prob best I leave it until I sell, and I do have the next viewing on Sat.

qh

[BlueSharp]

My discount rate has come to an end so looking to remortgage, and have a decent LTV and there's a few decent deals around.

However my house is up for sale, so ergo I get new mortgage but sell house, would I get done for early replayment? Some I have seen it is 2% in first year then 1% in second.

Anyone else done this, ie remortgage but sell house soon after?

Thanks

qh

No but when we remortgaged there were extra fees involved such as Mortgage arrangement fee, valuation and legal fees if moving to a new vendor. These could possible add up to more then the extra interest rates before even looking at redemption fees which most fixed rate mortgages have.

[captainham]

Depends on your provider. The likes of C&G will normally let you transfer it on same terms/amount (if you want to borrow more, the extra will be subject to current deals they have).

Read the small print, or even better, call them...

[Mark McBurney@CMME]

Have you considered switching to an offset mortgage for the remortgage?

Even if you don't want to take advantage of offsetting savings against your mortgage, they're a useful stop gap if you're looking for a better rate with no tie in?

[Craig at Nixon Williams]

I imagine that this depends on the lender, so a quick call to them would be worth more than what you get on here. For what it’s worth though, my understanding of this from my own mortgage provider is that if I move I can take the mortgage with me. If I borrow more on the new property then I would need to secure a new rate on the excess and if I borrow less then I will have to pay early repayment fees on the portion of the mortgage that I repay.

If I was in your shoes, I’d call the bank to find out!

[Power Mortgages Ltd]

No but when we remortgaged there were extra fees involved such as Mortgage arrangement fee, valuation and legal fees if moving to a new vendor. These could possible add up to more then the extra interest rates before even looking at redemption fees which most fixed rate mortgages have.

What BS said...

Firstly a number of lenders have refused remortgages in the past if they see the property is for sale. A lender considers the long term profitability of the mortgage and if they have to pay Solicitors to do the legal work for the remortgage, a surveyor to value the property as well as all processing costs then you redeem the mortgage a few months later they would probably actually make a loss on the transaction so this is why they would possibly decline the mortgage if the property is being sold.

As mentioned above, if you have to pay a new arrangement fee (most lenders nowadays will offer free legal fees and a free valuation) and a 'closing admin fee / deeds release fee / mortgage account fee' * delete as appropriate depending upon what your lender refers to the charge as (basically a fee normally up to £300 for the closing administration of your current mortgage) any potential saving you may make on a better rate for a few months would probably be eaten up by the costs of the fees to remortgage.

On the flip side, if your loan to value is particularly good on the current property for example you are borrowing 60%, you could secure quite an attractive rate at present which you would not have access to if you were looking to arrange a higher loan to value mortgage on the new purchase, for example 85%. In this instance, if permitted, you could secure the new rate on the current property then port it over to the new property when you sell your property and buy the new one borrowing any additional money you need at the current rates (which would be higher if the loan to value was higher). At least this way you could take the current value of your mortgage at a decent rate.

Either way, I would strongly recommend you explain your intentions in full to the lender as some lenders (if you remortgaged over to them, away from your current lender) may refuse to allow you to port your current mortgage if it was within a certain period of time of completion of the remortgage. Halifax I believe make you wait 6 months after the remortgage starts so if you took your mortgage from your current lender to Halifax and then sold 1 month later, they may not allow you to port that mortgage and early repayment charges would be applicable which would be very costly.

It would be better to be told you cannot do it rather than do it and find this out later as you do not want to jeopardise the purchase or cost yourself a lot of money unnecessarily.

[quackhandle]

Cheers for all comments, more viewings in the pipeline so will hold off.

qh