Surrending home?

continualdiamond · 22 March 2008 at 1:37PM

Can you do this? Where £23,000 in debt and OH has lost his job. Where in a debt management plan, but mortgage is tight.

Would look to sell, but don't think we'd get enough (owe £82,000, would need £86,000 or more to be okay). Plus don't have the time to wait for it to sell.

So can you just surrender your house? This would be great for us if we could, cos we'd look to rent and be able to keep up our debt managment plan as we had protection on it for unemployment. Thus avoiding BR.

tigerfeet2006 · 22 March 2008 at 1:48PM

Yes you can hand the keys back at any time. Have a read of Scarletts Diary, it's very imformative and inspirational.

http://forums.moneysavingexpert.com/showthread.html?t=596237&highlight=scarlett+diary

continualdiamond · 22 March 2008 at 1:55PM

How do you go about it then? What happens to the outstanding mortgage you have?

Thanks for the link, i appreciate it, i just haven't got time to read 13 pages thats all.

tigerfeet2006 · 22 March 2008 at 2:00PM

If you are going BR or have gone BR thre outstanding is included in your BR. In a nutshell.

All you do is write a letter and say you have moved out and no longer want the house and here are the keys. Don't sign anything they send you. Can't remember why, but it is on that thread. I strongly suggest you have a scan through it as there is some cracking advice on it.

Scarlett.1974 · 22 March 2008 at 2:28PM

Hi

We stopped paying our mortgage in October and moved out in January, into a rented house, so yes, it really is as simple as that

My husband rang them a week later to inform them that we'd moved out and that they could have it back. They sent us a form to sign, which we refused to and I wrote a letter instead saying it was our wish for them to repossess the property. Unfortunately they refused to accept this and are now (hopefully) starting formal repossession proceedings.

Northern Rock have certainly been in no rush to formally repossess the house though, 6 months on they STILL haven't taken it back :rolleyes:

The only thing I would concerned about though is if you're not planning on going BR you will be liable for any shortfall, costs, fees, charges etc..... (almost every time they have written to us to inform us we're in arrears they have charged us £25 a time). Your mortgage co. might well sell your house at auction for a lower price, just to get rid of it. If you're wanting to avoid BR I would (in your position) seriously consider selling it myself to keep costs, fees, charges etc..... to a minimum

continualdiamond · 22 March 2008 at 2:37PM

Thank you for the info. So basically we can 'move' out into a rental place and then go BR?

That sounds like a better plan, to stop paying the mortgage and look for a rental place. Then once we've moved out, go BR.

One q though, when you go BR why isn't the house dealt with right away, ie sold etc. Why take 6mths like in your case to take the house back? That i don't understand.

Scarlett.1974 · 22 March 2008 at 2:43PM

continualdiamond wrote: »

Thank you for the info. So basically we can 'move' out into a rental place and then go BR? Yes, that's exactly what we did. We moved in Jan and went BR in Feb

That sounds like a better plan, to stop paying the mortgage and look for a rental place. Then once we've moved out, go BR. That's it. Save the mortgage/debt payments towards the costs of moving into rented (you'll be looking at at least a month's rent in advance as WELL as a deposit, which in our case was another month's rent + £200) and your BR fees.

One q though, when you go BR why isn't the house dealt with right away, ie sold etc. Why take 6mths like in your case to take the house back? That i don't understand. It will always be a mortgage company's last resport to repossess and sell a property, especially in our case because we're in negative equity, so they're never going to get all their money back. It costs them to repossess a property, they would much rather you could come to an agreement to repay your arrears. Northern Rock also told me that they have to follow "certain procedures" too before starting repossession proceedings, I guess they have to give you plenty of chances to offer to pay otherwise it wouldn't look good in court

hope that helps a little

Toon_Dave · 22 March 2008 at 9:07PM

HI continualdiamond,

i am in position to 'move' out too as will have neg equity when go BR, and dont have time to arrange to sell etc..plus with neg equity legally you cant sell unless the remaining shortfall is paid to mortgage comp and any secured charges. But as both scarlett and tiger have said handing the house back and telling mortgage company you cant afford property is the way forward if you go for BR.

it does seem strange the morgtage companies dont deal with house immead to get best/highest price without fees, as if you have gone BR, then you have obviously renounced any wish to keep the property.

i have a question regarding rental for SCARLETT please. I have been looking at a flat today, Sh*t hole really so not going near but looking at more monday (bank hol) and tues however with regards to Estate Agent reference checks, did you have to disclose credit history problems before rented on the tenancy aggrement?

im just a bit concerned about that. i can complete the rest of the checks they need i.e. employers ref, bank account details and wage slips, but i'm not sure what i should do about this?

Does anyone have any suggestions regarding the renting aspect? or is there any threads with more detailed info on renting.

Thanks everyone for assistance so far and in the future.

Cheers
Dave. X

Scarlett.1974 · 22 March 2008 at 9:31PM

Hi Dave

When we were looking at rental properties we told the LA we had a bad credit rating (but not about the imminent BR) and would be more than likely to fail a credit check. The options they gave us were:

1. Secure a guarantor.
2. Pay 6 months rent in advance - they don't do any credit checks if you do this.

We went with the 6 months in advance option.

At the point of moving we'd already missed 2 mortgage & SL payments and 3 months unsecured debts repayments, so our credit would have been pretty bashed by this point. However, on the day we went to sign the tenancy agreement the LA told me that I had actually passed the credit check :eek: Now, I can only assume that the criteria is less strict than applying for credit..... there's no way I would have been approved for a loan or CC at that point I'm sure.

It DID ask on the tenancy agreement if we had any CCJs or been made BR, which we were able to honestly answer "no" to.

If I were in your position I would let them do the credit checks and keep your fingers crossed, but ONLY if you have a back up plan in place (the guarantor or 6 months in advance) otherwise it's money down the drain, to pay them to do the checks

HTH a little

Toon_Dave · 22 March 2008 at 9:54PM

thanks Scarlett.

i have read a few posts about the 6 months in advance.
i think this may be my only option...not sure who i would be able to ask as a guarantor - no-one i can think of other than company directors etc would pass the relevant checks regarding mortgage and finances...although my mum has savings etc which may be able to be used instead of regular income...she does have works pension monthly and no outgoings (as lives with brother).

seeing as i have only stopped paying bills this month i may have to save a bit longer for the 6 months rent, i am looking at rents of circa £500, so would need £3000 plus deposir and admind costs.

mummy!!!...lmao....may need to beg,steal and borrow from her.

Seeing as most of the debts, are unsecured and less than the mortgage and SL which is upto date the credit check my be ok.....i'm not so happy on that though!!

Did you rent privately? or is LA local authority? is that council or housing associations?

thanks
Dave.

debt_doctor · 22 March 2008 at 10:07PM

Scarlett your experience and advice on this area is excellent - well done !

DD:T :T :T

Surrending home?

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