Moving house, Please advice.

richash

HI, my parents need to move due to some financial problems with a secured loan which needs to be paid off.
The current property is valued at £140k, mortgage of £70k and secured loan of £41k but have been advised to offer £27500 as a settlement to pay it ff. They have found a property through friend which needs to sell qickly, which has been vaued at £100K but can get it for £80k.
Thecurrent lender say they cannot move the mortgae as they have adefault of one month on their secured loan, but have never missed any mortage payments.

Can anyone advice if this is normal practise and any ideas are very welcome.
thanks

hopefulfooluk

If the loan is secured and there is enough equity in the property - which there is - I hate to say it but I really don't see why the lender would accept £27500 to cover a £41000 loan. Even if you account for costs, they will spend less reposessing the house than they would lose accepting a settlement that low.

Why don't they pay off what they owe, walk away with the £29k, and buy the £80k property with a sizeable deposit and therefore low LTV? Problem solved. With that kind of money to put down on a property of that value, I doubt they'd have a problem getting a mortgage even if they are having difficulties right now.

richash

hopefulfooluk wrote: »

If the loan is secured and there is enough equity in the property - which there is - I hate to say it but I really don't see why the lender would accept £27500 to cover a £41000 loan. Even if you account for costs, they will spend less reposessing the house than they would lose accepting a settlement that low.

Why don't they pay off what they owe, walk away with the £29k, and buy the £80k property with a sizeable deposit and therefore low LTV? Problem solved. With that kind of money to put down on a property of that value, I doubt they'd have a problem getting a mortgage even if they are having difficulties right now.

Thanks for the advice, a insolvency practitioner worked out the figure of £27500 to pay them off.
Is it best to speak to a broker regarding the mortgage