Porting a mortgage and renting...

[Gravenwithdiamonds]

Our house went on the market last weekand we've had a fair bit of interest and one offer so it looks like we could be moving soon. However, the place we're going to is small and there is no suitable house available as yet and it's possible there won't be for some time (i've been watching the market for a while and it's very slow).

My question is, usually in this situation the vendors would move into rented if they wanted the sale to proceed, no? However, we are locked into our mortgage til summer 2014 and therefore have to port it if we want to move or else pay a hefty fee. Surely you can't port a mortgage if you go into rented - or is there a clever trick I'm overlooking?

[madwomanintheattic]

You can usually port if you have a date and a purchase property and a shortish period before move-in (and delays due to contract etc).

I can't imagine any mortgage company would authorize a port without anything to actually mortgage - you can just pay off the mortgage and secure another one though? It isn't a deal breaker - and presumably you would have no problems qualifying for a mortgage (and probably one at a better rate than you have now, if you're in my position!!)

We had around 6 weeks, I think. But our purchase property had already been agreed and the hold-up was some clerical point of procedure and then a request from the vendor of our purchase property to delay move-out to fit in with his purchase. We had to pay a much higher rate during the carry-over iirc, but this probably varies bank to bank...

V interesting q though - will wait for a conveyancing type!!

[madwomanintheattic]

(Check with your personal banker - have you already got a payout quote? If it's only got until 2014 to run, it probably won't be huge anyway, and the better rate on the new mortgage might make up for some of the fee)

[FamiliesShareGerms]

We had six months in which to complete our purchase after our sale went through. Read the small print and speak to your lender

[Gravenwithdiamonds]

ERC would be £5000 - we are on a good rate and would have to have another mortgage, which would also have a good rate (we're upsizing).

I've just googled it and it seems you can still port without buying/selling on the same day by freezing your mortgage but only up to three months usually - to be honest, I couldn't guarantee that we could find and buy another house within that time and/or that our buyers wouldn't get fed up waiting!

Maybe it's better to pay the early repayment fee then secure a good mortgage for the total amount? £5000 seems like a lot though...

[Gravenwithdiamonds]

Interesting families -six months is more realistic

[madwomanintheattic]

£5000 is nothing in house purchase terms. Our most recent quote was for over £20,000 ERC, and our current rate, to be frank, is shocking. We need to ditch it, but can't afford to. Need to get a new payout quote and start schlepping it around advisors again to see if we would actually save money in the long term. Still don't think house will sell though! (Is already worth £80,000 less than we paid for it, at a conservative estimate, and there are gazillions on the market).

Don't miss the opportunity if you have a buyer x

[Gravenwithdiamonds]

Thanks mad, that's really interesting - am completely ignorant about this sort of thing so hae no idea what's 'normal'!

[FamiliesShareGerms]

I would suggest going through your current deal with a fine toothed comb and discussing it with a broker. We ported our mortgage because although the rate isn't fantastic, it's an "old style" mortgage that allows us to make overpayments then take payment holidays and other flexible things that just aren't on offer any more.

Depending on where you are, if you have a good quality buyer lined up, that can be worth a fortune and you don't really want to lose that

[madwomanintheattic]

Well, nor me, really! But if it was only going to cost me £5k, I'd be remortgaging as we speak, even without the house move!

We're all in different circs, though, so best to get your lender (and a few others) to go over the details with you, and see if you can get a good rate locked in whilst you hunt, and see if it works out better in the long term.

[crochetcircle]

Which bank are you with? We just did this with nationwide and avoided erc. It worked out better to get a new mortgage, but we could have ported the old with a gap of 6 months...

Let me know if you want to know more.

[Gravenwithdiamonds]

We're with Halifax - I need to speak with them as they been good so far and we have a good LTV.

Thanks crochet, I may DM you if I have questions - good to know you can sometimes work round the fees etc.

[MrsWoodforTrees]

Our bank held open the mortgage we had for 6 months whilst we rented having sold our house. (HSBC)