Sorry for the long post but I wanted to provide all of the facts.
I had an offer accepted yesterday on a new property. After the excitement settled, I've realised I have a million and one questions, so I will likely be posting across various sub's. But I've run into my first issue which is likely the biggest one.
The plan is to buy the new property before we sell our existing one. The new one has gone through probate and the sellers want a quick sale. We have the savings to pay the deposit and additional stamp duty on the new place before we sell ours so we used the fact we wouldn't have a chain to negotiate a lower price. We will start sorting out the minor issues on our place and then get it on the market, however, we do not expect to sell ours before we buy the new place. For additional information, we will live with my parents for a few months whilst we renovate the new place.
I'm not a mortgage expert by a long shot and I am planning on speaking to a mortgage advisor this week or next, but this is the plan I had in my head:
Purchase price of new property = £450k
Expected sale price of existing property = £400k
Step 1 - all simultaneously
- Port my existing mortgage to the new property. £220k remaining balance on 1.8% until May 2027.
- Take out an SVR mortgage for £220k on my existing property to pay off the existing mortgage that I ported
- Take out an SVR mortgage of £185k (£450k - £220k (ported mortgage) - £45k (10% deposit of total purchase price.
Step 2
- Sell my existing property. Sale pays off SVR mortgage No early repayment charge.
Step 3
- May 2027, ported mortgage expires. Take out one new fixed rate mortgage to cover the total house price less deposit. No early repayment charge on expired ported mortgage or SVR mortgage.
In my head I thought this shouldn't be an issue. I'd be paying two mortgages for a short period of time, but affordability shouldn't be an issue based on my income.
However, I called Santander (my existing mortgage provider) and asked the initial question and I was met with a straight NO. I can't port my mortgage at all if I buy before selling. I would then be hit with a 10% repayment charge once I sell my existing property and exit my current deal.
I wanted to ask two questions:
- Is this 100% correct on Santander's part? I only spoke to one person so I'm hoping she has it wrong.
- If it is, what are my options?
This completely throws a spanner into us buying the new property as if I can't port my mortgage and get hit with a £20k+ early repayment charge, we won't be able to afford the new place.
Thanks!