mortgage shortfall

rough3b · 8 March 2017 at 5:32PM

hi need a bit of info im buying ahouse and the owner has a mortgage shortfall.he paid £240000 for it 10years ago,it is now in a poor state of repair ,new roof needed rewiring,all new windows no heating ,damp and a few more things.i paid £180000 for it so he has a shortfall of £60000 plus any otherdebt he may have on it he noe livives in NZealand my solicitor says she does not know how long the shortfall will take to sort out we were planning to move in on 23 march our house is sold aswell,surely this problem should of been noticed the minute our offer was accepted 2 months ago starting to think about pulling out would love anybodies advice or knowledge or experience about this thank you

foxy-stoat · 8 March 2017 at 5:39PM

Not sure how you know how much his mortgage is.

If he paid £240,000 for it 10 years ago and bought it on an interest only mortgage at 100% LTV and hasn't made any overpayments then the bank will not let him sell it for £180,000 without a cash injection at or before the point of sale.

Have you exchanged contracts yet and is your completion date the 23rd March?

MyOnlyPost · 8 March 2017 at 5:39PM

The fact he paid £240,000 for it and you are buying it for £180,000 doesn't mean he has a £60,000 shortfall.

He would have probably had to pay a deposit when buying which could be 5, 10, 20% etc. He has also been paying down the mortgage all the time has has owned it (assuming not interest only). In reality the shortfall might only be a few hundred or a few thousand pounds and he may have that in savings to cover it.

sparky130a · 8 March 2017 at 5:40PM

I'm completely lost.

ReadingTim · 8 March 2017 at 7:07PM

sparky130a wrote: »

I'm completely lost.

The vendor's in negative equity therefore his/her mortgage lender won't release their charge over the property until a plan has been agreed to make up the shortfall.

The OP can't complete until the charge has been released.

At least that's what I think the OP is trying to say. Had they used the right words, in properly spelled and punctuated sentences, we'd be able to provide answers, rather than still trying to guess what the question is....

Hoploz · 8 March 2017 at 8:39PM

There's really nothing you can do about this. If the solicitors cannot give a timescale for its resolution you'd better look elsewhere.

G_M · 8 March 2017 at 9:04PM

".i paid £180000 for it"

Let's hope for your sake that this is not true.

Have you either

a) Exchanged contracts and/or

b) Completed

??

Now re-post, using short clear sentences, with full stops.

Remove irrelevant information (eg what he has spent on the property).

And then ask you question.

rough3b · 8 March 2017 at 9:25PM

sorry about the spelling didnt have my glasses ,we were hoping to complete this friday but the shortfall hasnt been sorted out yet ,then my solicitor moved it back to the 23 of march but then informed me today that it might take longer.i had an offer of 180,000 accepted over 2 months ago and i would of thought the shortfall problem might have shown up earlier in the buying process

rough3b · 8 March 2017 at 9:52PM

we were due to complete this friday the 10th but that got put back till the 23rd of march ,then i was informed by my solicitor today that it may now take longer,im a bit confused why my solicitor keeps giving me dates to complete when she doesnt know herself instead of just saying dont do anything yet,im practically all packed up and have stuff in storage because she the 10th is going to be possible.

TBagpuss · 8 March 2017 at 10:23PM

Have you exchanged contracts?

The seller would need to either come to an arrangement with his lender, that they will release their charge over the house even though the mortgage isn't cleared in full (in which case the seller will end up owing the money as an unsecured debt)

or he will have to fund the shortfall from savings or other borrowings,

or the sale will fall through because you can't go ahead and buy it unless you can give your mortgage lender a first charge over the property .

AdrianC · 8 March 2017 at 10:38PM

rough3b wrote: »

we were due to complete this friday the 10th but that got put back till the 23rd of march ,then i was informed by my solicitor today that it may now take longer,im a bit confused why my solicitor keeps giving me dates to complete when she doesnt know herself instead of just saying dont do anything yet,im practically all packed up and have stuff in storage because she the 10th is going to be possible.

OK, I think we can presume you've not exchanged contracts - a completion date would be set at exchange.

So, as yet, you've not actually "bought" anything. And, if your solicitor has a quarter of a brain in their head, you won't be doing until the vendor can come to an agreement with their lender over the shortfall, however much it may or may not actually be...

Remember, the discussions that this is all hanging on do not involved your solicitor. They are going on between the vendor, their lender and hopefully their solicitor. The EA might be in on the discussions, but probably not. Your solicitor is getting it second- or third-hand from their solicitor, and is merely passing it on to you. Don't shoot the messenger.

PLEASE READ BEFORE POSTING

mortgage shortfall

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free