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    • Roline83
    • By Roline83 15th Jun 17, 9:42 AM
    • 16Posts
    • 1Thanks
    Roline83
    Repayment Mortgage - help with selling
    • #1
    • 15th Jun 17, 9:42 AM
    Repayment Mortgage - help with selling 15th Jun 17 at 9:42 AM
    We've got a repayment mortagage at present. Been at our current property for ten years. Amount we borrowed was £85,000 this was made up of £72,000 secured and £13,000 as an unsecured loan, all with the same company. We are now looking to sell, had property valued and figure is £65,000 rang the mortgage company today who told me outstanding on mortgage is £69,325. What I want to know and didn't ask the lender was if we sell, obviously it will be at a loss, will all of the money go to the mortgage company and then we are responsible for the unsecured remaining balance or does it pay off the secured element and we are still responsible for the unsecured element?

    Thanks
Page 1
    • amnblog
    • By amnblog 15th Jun 17, 10:57 AM
    • 10,022 Posts
    • 3,902 Thanks
    amnblog
    • #2
    • 15th Jun 17, 10:57 AM
    • #2
    • 15th Jun 17, 10:57 AM
    This sounds like a Northern Rock mortgage, is it?


    Why are you thinking of selling?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Roline83
    • By Roline83 15th Jun 17, 7:54 PM
    • 16 Posts
    • 1 Thanks
    Roline83
    • #3
    • 15th Jun 17, 7:54 PM
    • #3
    • 15th Jun 17, 7:54 PM
    Yeah, Northern Rock mortgage. Selling because we need somewhere bigger since second child was born. x
    • Thrugelmir
    • By Thrugelmir 15th Jun 17, 8:38 PM
    • 55,853 Posts
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    Thrugelmir
    • #4
    • 15th Jun 17, 8:38 PM
    • #4
    • 15th Jun 17, 8:38 PM
    Overpay the mortgage/unsecured loan by whatever you can afford to. That will at least accelerate repayment of the debt. Your savings won't be earning as much in interest as you are paying.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • amnblog
    • By amnblog 15th Jun 17, 10:56 PM
    • 10,022 Posts
    • 3,902 Thanks
    amnblog
    • #5
    • 15th Jun 17, 10:56 PM
    • #5
    • 15th Jun 17, 10:56 PM
    When you sell (and Northern Rock will need to allow you to do so), the unsecured loan does not need to be repaid.

    [the original purpose of the unsecured element is to reduce the risk of negative equity]

    The thing you do need to watch is the interest rate on the unsecured loan. This rises to 8% above the standard variable rate if you pay the secured loan (mortgage) off.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Roline83
    • By Roline83 17th Jun 17, 11:15 AM
    • 16 Posts
    • 1 Thanks
    Roline83
    • #6
    • 17th Jun 17, 11:15 AM
    • #6
    • 17th Jun 17, 11:15 AM
    No chance of any overpayments as we have no spare money.

    Do I need to get permission to sell due to negativity equity? I'm all new to this. What happens to the unsecured loan?
    • amnblog
    • By amnblog 17th Jun 17, 11:55 AM
    • 10,022 Posts
    • 3,902 Thanks
    amnblog
    • #7
    • 17th Jun 17, 11:55 AM
    • #7
    • 17th Jun 17, 11:55 AM
    You should speak to NR before you attempt to sell so they can explain what would happen and what they will require from you.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Thrugelmir
    • By Thrugelmir 17th Jun 17, 12:08 PM
    • 55,853 Posts
    • 49,220 Thanks
    Thrugelmir
    • #8
    • 17th Jun 17, 12:08 PM
    • #8
    • 17th Jun 17, 12:08 PM
    No chance of any overpayments as we have no spare money.

    Do I need to get permission to sell due to negativity equity? I'm all new to this. What happens to the unsecured loan?
    Originally posted by Roline83
    Speak to the lender directly and explain the situation. They have a duty to assist you if needs must. The lender cannot stop you from selling the property providing the secured loan element is repaid. Though the interest rate on the unsecured element may well increase. Which may not help improve your overall financial situation.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
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