mortgage shortfall and selling house

klaybear

Hi, hope someone can give me some advice

I have had to relocate to Scotland with my job and my house in England is up for sale. I am lucky that i am able to stay with family long term if necessary. The thing is that I remortgaged Oct 07 with N Rock on a 5 year fixed rate ( not expecting to move!) and I have £6000 early redemption fees (which they will not remove). With this and the current market I will have to sell at negative equity. I may be 10,000-15,000 short.
My question is can I pay shortfall on a credit card to N Rock and then arrange a personal loan? My mortgage plus household bills is roughly £1200 a month so without this I could afford a loan and I have a good job. Any thoughts??

Thanks so much

sdooley

could you passport the loan to a new property in Scotland (perhaps after living with your parents for a bit to save money for a deposit). Then you might not have to pay the ERC.

Or if you're sick of the property market you might have to just get a loan to cover your losses before they grow. Good luck getting a good price for your property!

klaybear

Thank you Sdooley, the thing is I cannot afford to save for a deposit for a new home while i am paying my mortgage with NR, I am still paying this monthly and have not missed any payments. What do you mean by passport? Would this not mean that i would have to pay a deposit straight away with a new mortgage? Also, will NR accept a credit card to pay for shortfal? I have enough limit to do this and then would pay off in full with a loan??

Thanks again

sdooley

You will need a deposit to passport your mortgage over. You could ask NR for permission to let the property out on your existing fixed rate (you'll have to pay a fee) while you are working in Scotland.

Otherwise your choices are very limited, if you must move North of the border, you can either try to sell and get a loan for the difference or get Northern Rock to repossess and they will sue you for the shortfall and their costs of repossession.

sdooley

£15,000 on a credit card is scary!

klaybear

I know! £15000 on a cc is scary but i thought it would be easier to complete with a cc. I will definately get a loan though to clear it soon after. I just hope NR will accept a cc- i dont see why not if i have it available.:o

MarkyMarkD

It's "port" not "passport". You would have to pay the ERC up-front and then would get it back if your completed a new mortgage - usually within 6 months (but you'd have to check with NR - and they are scarcely an easy lender to get a loan from right now).

And no, you can't pay money off your mortgage by credit card. But you could get a balance transfer from an Egg card or MBNA card to your current account, and then pay the mortgage off with a cheque.

Debt_Free_Chick

klaybear wrote: »

I know! £15000 on a cc is scary but i thought it would be easier to complete with a cc. I will definately get a loan though to clear it soon after.

Don't see why you couldn't take a loan out beforehand and have the cash in the bank ready to pay off NR at the time. You would have to get cleared funds to your solicitor before completion, so that the mortgage is cleared and the buyer has "unencumbered title" (in legal terms, relating to a mortgage, a property with no outstanding mortgage/charge).

klaybear

Thanks, I will do, i just didn't know what the timing would be and how/when to give loan to solicitor etc. I have appt with financial advisor at my bank LLoyds next week

:huh: