Keeping the house, to stay or not to stay that is the question!

Reevesie76

Well next month we will hopefully be petitioning our bankruptcy :eek:

Our first thoughts were to leave our house which is mortgaged with Northern Rock and has secured loans with NR and Welcome Finance, we are about £20K possibly more in negative equity at the moment. We would go into rented accommodation and take it from there.

But today we were have a tidy up / spring clean and realised how much we love our house and how well it suits us. This in turn got us to talking about the possibility of staying here, starting up paying the mortgage and secured loans again and seeing what happens.

My main concern is that if we do stay and continue to pay NR and WF, what happens in a year when our fixed rate is up, we only pay interest only at the moment with is £790 a month, we certainly can't afford to pay repayment. We signed up for a three year step with NR, so have roughly another year with them, but when that is up will they kick us out, expect us to pay a huge increase so we would then have to go down the repossession route, I just haven't a clue.

The other thing is do we really want WF secured loan round our neck for the next 10 - 12 years. I know that if the housing market goes up we could sell and pay the secured loans off, but thats only an IF.

Sorry for the babble, im just airing our options, any advice would be great.

peachyprice

Well, I would say if you're not 100% sure about leaving your home you should stay put and see what happens within the next year and at least give it a go.

If, in a years time when your fixed rate you cannot afford it and have to move into rented, an shortfall will still be included in your BR, but you never know what is around the corner, you could be in a whole different position from now, and so could the mortgage market.

HTH

Reevesie76

I didn't realise that in a years time if we did leave that the shortfall would be included in the BR, thats interesting to know, thats peachyprice, that does help. Its so hard to know what to do for the best. We want to start a family this year too, decisions decisions.

DON79

Hi Reevesie, whatever you decide to do about your house, I hope it does work out for you.

But make sure you get finally settled before the pitter patter of tiny feet comes along, I have moved house with a 3 month old baby and never again! :eek: And get saving now too, I love my babies but I wouldn't be in this much debt without them, not that I would change them for anything.

Hope everything works out for the best.

geoffky

Are You Sure On The Shortfall In Twelve Months?

peachyprice

Yes, definitely, from the IS website

Question: If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?Answer: A debt which is secured by a mortgage or a charge on a property is still a provable bankruptcy debt. The mortgage loan company is "a secured creditor" which means they have rights over an asset, the
house, and can require the asset to be sold to pay their debt. These rights are not affected by the bankruptcy. On the making of a bankruptcy order the mortgage loan company could
make a claim in the proceedings but, unless it wished to give up the security, could only claim for any (estimated) shortfall.
If you continue to live in the property it is likely that you will continue to make payments to the mortgage loan company to avoid the property being re-possessed. When the property is eventually sold any
shortfall to the mortgage loan company is still a provable debt in the bankruptcy, even if you have been discharged, as you are released from the debt on discharge.

Your bankruptcy does not affect the obligations of any joint owner who has not been made bankrupt to repay the mortgage loan debt or any shortfall, as they are still liable for the whole of the debt.

After the date of the bankruptcy order the mortgage loan creditor may ask you to sign a "deed of acknowledgment" of the outstanding debt. If you have signed such a deed the mortgage loan creditor can take action against
you to recover any shortfall following the sale of the property.

hravey

Hi do'nt know if this is of relevance but my fixed mortgage with northern rock was up at the end of nov 08 and because i have a secured loan with welcome finance i can't get a mortgage anywhere i'm not in negative equity or anything but looks like i have to sell after 2 years renovating because i can't afford the full mortgage (now on interest only) and all the bills on my own. Can anyone advise ???