Page 2 | Early mortgage exit

Daveismyhero · 2023-10-29T07:36:50+00:00

Any mortgage people on here? We're in the process of buying a new house (new build if that makes a difference) due to complete and move in late December. Current fixed mortgage term is up at the end of January. Mortgage advisor has came back to us today and said our current mortgage has an early exit charge of 3500. Are they seriously going to make us pay that for the sake of 5 weeks and 1 mortgage payment? We can't afford to find that money and will have to back out of the sale if that's the case and with a baby on the way it's the last thing we need as pur current house is just not suitable. Does anyone know if there are any ways around this or they'd let us just pay the final payment early? Obviously I'll ring the bank tomorrow but its worrying me today

OfMark87 · 29/10/2023 12:44

Very true @Toooldtoworry still worth speaking to the lender as they may have something they can do for the op.

titchy · 29/10/2023 12:57

You've been pushed into completing quickly by the builder. Using the same solicitor is madness too, and you're using their mortgage broker - wow they saw you coming! You've been really naive and let yourselves be pushed into this by their sales tactics. Say no. Get your own independent solicitor and mortgage broker and surveyor (I bet you've used their surveyor haven't you, and not had an independent valuation on your house?)

Issummernearlyover · 29/10/2023 13:28

We recently bought a new build. We were given six weeks from reservation to complete. Cash buyers. We rushed everything through. Then we find out that one of the neighbours took nearly a year to complete as their sale fell through four times and the developer waited for them! With the market so difficult at the moment, I think that the developer should fit in with your schedule! There's no harm in saying that you want to complete on a date that suits you.

WYorkshireRose · 29/10/2023 13:52

So you used the house builder's recommended mortgage advisor and solicitor? That was mistake number 1. Mistake number 2 would be letting them think they can dictate all the terms. You need to TELL them that you want to delay completion until X date in the new year when your current mortgage deal has ended, to avoid paying the early exit fee. I would expect in the current market they'll just be happy not to lose the sale altogether.

Original poster

Daveismyhero · 29/10/2023 15:12

titchy · 29/10/2023 12:57

You've been pushed into completing quickly by the builder. Using the same solicitor is madness too, and you're using their mortgage broker - wow they saw you coming! You've been really naive and let yourselves be pushed into this by their sales tactics. Say no. Get your own independent solicitor and mortgage broker and surveyor (I bet you've used their surveyor haven't you, and not had an independent valuation on your house?)

Bit presumptuous there mind. I've never said were using their mortgage advisor, we're using the same advisor that we've used for the last 10 years from when we bought our first house. Solicitor is also the same one my whole family have used its coincidence that the builder uses them too (small local building developer not one of these big ones) we also had our house valued by an independent estate agent and their estate agent offered us more than we thought they would so I really don't think they are trying to take the mick out of us in that respect

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Original poster

Daveismyhero · 29/10/2023 15:14

WYorkshireRose · 29/10/2023 13:52

So you used the house builder's recommended mortgage advisor and solicitor? That was mistake number 1. Mistake number 2 would be letting them think they can dictate all the terms. You need to TELL them that you want to delay completion until X date in the new year when your current mortgage deal has ended, to avoid paying the early exit fee. I would expect in the current market they'll just be happy not to lose the sale altogether.

See above reply, we use our own mortgage advisor that we've used for years from when we bought our first house. We also are using the same solicitor we've used previously, it's coincidence that they use the same as they are a small local developer so use a local solicitor. It's not a big name ie Bellway, barret etc

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LizzieSiddal · 29/10/2023 15:27

Agree with Pp, just TELL the builders you need to delay until your fixed rate is over, otherwise you will have to pay over £3k. Or tell them if they want to complete before Xmas they can knock £3K off your new house.

titchy · 29/10/2023 18:38

Fair enough, but I would strongly recommend you use a different solicitor. At the end of the day although I'm sure they're professional, the developer account is going to be worth so much more to them than your business so that's who'll they'll prioritise.

butterflycatcher · 29/10/2023 22:48

A relative of mine works in the house building industry and there is always a push to complete as many homes as possible pre Christmas because December is their year end and they will want the sale to reflect in their figures for 2023. Go back to them and say December is not possible and xyz is the date you can complete on. Be firm. They are going to push what is in their best interest, now you need to push what is in yours.

Outnumbered99 · 30/10/2023 09:22

speak to your builder- they might be able to come up with a solution, either pushing back completion or if not they might be able to help with the ERC.

I second what others have said re: the lender- wouldn't hurt to speak to them and see if a solution might be possible but all they are doing is sticking to their original contract with you. Did you say your mortgage wasn't portable or just on less favourable terms? Might they have a product with no ERC you could port to, for a month or two, then remortgage away from them altogether- your broker should be able to guide you with this.

Unicorn2022 · 30/10/2023 09:54

As someone mentioned already, December is year end so they will want to push the house sale through. Tell the builders you need to delay completion until the end of January but if they really need you to complete in December you can do it if they take £3500 off the price of the house.

Original poster

Daveismyhero · 30/10/2023 13:04

Builders have said they aren't prepared to budge on the date as they need it completed for their year end. The house is the last of its type on the estate and they had a lot of interest in it, we were lucky that we got in there first for it so I'm guessing they have a queue of reserves if we pull out.
Going to speak to our lender this afternoon, we do have the ability to port but their rate for returning customers is much higher so over 2 years we'd end up paying the extra 3.5k anyway

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plumtreebroke · 30/10/2023 13:46

Will the builder reduce the house price by £3,500 to cover your extra payment? They might be slightly negotiable if the alternatives are lose the sale or complete a month later. Or even leave out some of the finishes for you to complete later to allow for a slight reduction in price.

Twiglets1 · 30/10/2023 14:05

Daveismyhero · 30/10/2023 13:04

Builders have said they aren't prepared to budge on the date as they need it completed for their year end. The house is the last of its type on the estate and they had a lot of interest in it, we were lucky that we got in there first for it so I'm guessing they have a queue of reserves if we pull out.
Going to speak to our lender this afternoon, we do have the ability to port but their rate for returning customers is much higher so over 2 years we'd end up paying the extra 3.5k anyway

Could you port the mortgage and switch to a standard variable or tracker rate with no early redemption fee? I’m thinking maybe you could pay that rate for just a few months before switching to a different lender

LizzieSiddal · 30/10/2023 16:02

The builders are seeing who blinks first. The there is no way they’d be able to complete before Xmas with a new buyer.

PastorCarrBonarra · 30/10/2023 18:21

LizzieSiddal · 30/10/2023 16:02

The builders are seeing who blinks first. The there is no way they’d be able to complete before Xmas with a new buyer.

I agree with this. They may have a reserve list of interested parties, some of whom may still be keen and would happily pay a deposit to secure the house this week, but the chances of completion happening by Friday 29th December are small. It’s eight weeks from this coming Friday and there are two bank holidays in between. The buyer’s solicitor would be starting from scratch, for a start.

Given your pregnancy, the best solution would be a December completion with £3.5k off the price, I suspect.

Ask your solicitor to put the brakes on for now. They’re acting for you, so they should comply. Put the ball back in the builder’s court but don’t rush. They may agree or they may offer a smaller discount. They may do nothing. But let’s face it, they know full well that they probably won’t complete in 2023 unless it’s with you.

messybutfun · 30/10/2023 20:01

Offer your lender to pay all the monies due until the end of your contract, I.e. the interest for the remaining 5 weeks.

There is then no reason for them to not agree to close your mortgage early as they will be in the same position as if you had the mortgage until the end.

I did the same thing 15 years ago and at that time there was no consumer duty and only limited consumer protection.

Apart from that I would definitely use a different lawyer. Nobody can convince me that one firm can represent the interests of both sides effectively.