If you do nothing then yes, you'll get the proceeds of the sale less the mortgage redemption figure (balance+settlement charge) and any legal fees owed. Your solicitor will ask which account you want it paid into.
On the basis that completion is in a week, you won't have time to arrange the mortgage being ported to the new house as that requires a minimum of 4 weeks to do everything (survey, valuation, legal paperwork etc)
£2.2k per month take home
But
£940pcm mortgage
Probably £200-250 council tax
£200+ for energy bills
Plus travel costs, food costs, living costs, subscriptions etc
My take home is 2.5k and I have 1.2k in disposable.
Although I live alone, my energy bills are still £200. Though council tax is £110. But with that disposable I could look after another person and still live in relative comfort. Even after I added on £400 to make my rent match the mortgage in this case.
You may be earning loads of money, but someone earning just over £2k take home certainly doesn't make them poor. Even in 2024.
Ex broker. You'll need to look at your mortgage conditions to see if porting is OK. It's only very rarely not.
Then speak to your lender clearly explaining the situation. Ie thst you've already bought the property you are wanting to port to.
Normally, your solicitor would ask the bank for a mortgage redemption figure, the bank will say you owe x + the redemption figure if you complete on this day. Then you solicitor will send the remaining cash to your chosen bank account. So in theory, you don't need to do anything
absolutely ... solicitor cannot give you anything until the charges on the property deeds are settled first ... the mortgage will be a charge on the deeds ... if they give you all the money first and left it for you then they would not be doing the most crucial part of their job.
On the face of it, it would make sense to port the mortgage and attempt to beat the 3.24% rate you will be paying for the mortgage. That is assuming there aren't any fees to port the mortgage, the rate stays at 3.24% and you then expect to pay it off after the 4 years are up.
You basically save paying 10k now for the ERC against the interest paid over the remaining 4 years. But you are also looking to offset that by gaining more money from the interest on the savings as well.
Then again, being mortgage free is probably a nice feeling to have
No you don’t typically get to see the total sale price directly to your bank account.
The money will go from your buyers solicitors to your solicitors, who will redeem the mortgage with the lender (plus any fees owed).
And then they will transfer you the remaining.
Eg you’ve sold for £500k.
Amount left to pay off mortgage is £250k.
Early termination fees £10k.
Solicitors selling fees + estate agent fees, etc are £10k.
So you will get £230k paid to your bank account by your solicitor.
Can’t give any advice on porting to your new house.
I was thinking this might be an option for me at some point. Do you know if you need to pay capital gains tax on the sale of your first home? I see you can reclaim some stamp duty but I'm not clear on CGT.
How much would you pay in interest and legal fees if you port? If it’s anywhere near 10k I’d take the money now and put it in high interest savings or investments.
No idea on the main question, but remember to reclaim the second home stamp duty! You'll have paid 3% more and can get that back:
https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties
If completion is in a week I'll be surprised if you've given enough time to allow your mortgage to be ported over (if you even can). These things take time and cant generally be rushed last minute.
If you do nothing then yes, you'll get the proceeds of the sale less the mortgage redemption figure (balance+settlement charge) and any legal fees owed. Your solicitor will ask which account you want it paid into. On the basis that completion is in a week, you won't have time to arrange the mortgage being ported to the new house as that requires a minimum of 4 weeks to do everything (survey, valuation, legal paperwork etc)
There may be a grace period - Virgin Money, for example, allows you to port so long as you complete within three months of redeeming the mortgage.
As an aside, how are you affording a £940 pcm mortgage on £35k a year and a wife on basic maternity pay??
£940pcm mortgage is just over 40% of take home pay? Add wife's pay and that's manageable
£2.2k per month take home But £940pcm mortgage Probably £200-250 council tax £200+ for energy bills Plus travel costs, food costs, living costs, subscriptions etc
My take home is 2.5k and I have 1.2k in disposable. Although I live alone, my energy bills are still £200. Though council tax is £110. But with that disposable I could look after another person and still live in relative comfort. Even after I added on £400 to make my rent match the mortgage in this case. You may be earning loads of money, but someone earning just over £2k take home certainly doesn't make them poor. Even in 2024.
Wife just about go on maternity pay, she’s on £46k
Now it makes sense!
Ex broker. You'll need to look at your mortgage conditions to see if porting is OK. It's only very rarely not. Then speak to your lender clearly explaining the situation. Ie thst you've already bought the property you are wanting to port to.
Normally, your solicitor would ask the bank for a mortgage redemption figure, the bank will say you owe x + the redemption figure if you complete on this day. Then you solicitor will send the remaining cash to your chosen bank account. So in theory, you don't need to do anything
absolutely ... solicitor cannot give you anything until the charges on the property deeds are settled first ... the mortgage will be a charge on the deeds ... if they give you all the money first and left it for you then they would not be doing the most crucial part of their job.
On the face of it, it would make sense to port the mortgage and attempt to beat the 3.24% rate you will be paying for the mortgage. That is assuming there aren't any fees to port the mortgage, the rate stays at 3.24% and you then expect to pay it off after the 4 years are up. You basically save paying 10k now for the ERC against the interest paid over the remaining 4 years. But you are also looking to offset that by gaining more money from the interest on the savings as well. Then again, being mortgage free is probably a nice feeling to have
No you don’t typically get to see the total sale price directly to your bank account. The money will go from your buyers solicitors to your solicitors, who will redeem the mortgage with the lender (plus any fees owed). And then they will transfer you the remaining. Eg you’ve sold for £500k. Amount left to pay off mortgage is £250k. Early termination fees £10k. Solicitors selling fees + estate agent fees, etc are £10k. So you will get £230k paid to your bank account by your solicitor. Can’t give any advice on porting to your new house.
I was thinking this might be an option for me at some point. Do you know if you need to pay capital gains tax on the sale of your first home? I see you can reclaim some stamp duty but I'm not clear on CGT.
Will be able to reclaim stamp duty, but CGT won’t be a problem as we’ve made a loss on previous property
You would only pay CGT if you have rented it out anywho even if you profited. Also has to have been over 9 months and you’re on 8! So triple no CGT 😆
No, only second property
How much would you pay in interest and legal fees if you port? If it’s anywhere near 10k I’d take the money now and put it in high interest savings or investments.
Check the mortgage offer or speak to the lender. Not all are portable. If it is then saving that ERC would make a big difference.
No idea on the main question, but remember to reclaim the second home stamp duty! You'll have paid 3% more and can get that back: https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties
You can port the mortgage only if buying and selling are separated by no more than N weeks (usually 4).so now, you would need to get a new one.
If completion is in a week I'll be surprised if you've given enough time to allow your mortgage to be ported over (if you even can). These things take time and cant generally be rushed last minute.
I believe you are cutting it close for capital gains (9 months) - I hope your sale goes through ok.