If I sell my house and go into rent accom for 6-12m could I keep my mortgage but not the house?
I want to move to new area in approx 12m. Thinking of putting house on market now and if necessary going into rented accom so I have mobility when the time comes. But I have an absolutely fantastic mortgage deal atm which I would be giving up by paying off the mortgage and starting again in 12m.
I can def afford mortgage repayments and rent...I have windfall in the bank and would also have substantial equity in bank too.
But I am guessing it will be a no from bank pov cos unsecured. I am also a student so not eligible for taking out a mortgage.
Nationwide offered to give us 6 months grace on selling and buying but not with current mtge ( was a good deal though). They won't let you keep current deal as presumably is quite good and they want you to pay more!
We are with HSBC on a fixed term, we moved mid term and they said they would hold the mortgage for us for up to 6 months. We would however have to pay the early redemption fee which we would get back once we'd started the mortgage up again at the new property, I guess if we didn't manage to find a new house in time we would have just lost the money and the deal.
Check with the mortgage company as we did something similar, sold a house and went to rented for nearly a year whilst looking and we we were able to hold on to the mortgage (fantastic rate) at a zero balance until we found a new place. One thing however that might be an issue is your income, when you find a house it will be treated as a new application, even if they honour your existing deal, and your income now will be assessed. Mortgages have really tightened up and affordability is an assessment using rates that might be possible i.e Santander use a rate of 6% for affordability even if your deal is lower. They also have a cost per month for each dependant (child) so your disposable income is determined by them not by your actual spend.
We have a flexible mortgage product which allows us to port the mortgage product/rate within a 3 mth period i.e we can technically have a gap between completion of one house and the purchase of another which is what we are doing. The mortgage offer says that it is valid for 6 mths so I guess that once the funds have been reserved for you, the lender is unlikely to withdraw it. BTW, this is also a Santander product (originally an Abbey National mortgage product). We also found our new house and made a new mortgage application within days of completing the sale of our old house to retain the 0.49% over BoE base rate. You have to read the terms and conditions of your current mortgage - it may well be different. At the time, we took it out, our flexible mortgage wasn't the cheapest rate because there was a slight premium for its flexibility.