selling house vs reposession?

papermoney

Can you be repossessed without going bankrupt?
I know that I would have to pay back any shortfall in equity (in which case I may aswell sell the house myself I know) but wondered if it would be possible to come to some agreement with the mortgage company.

I owe on mortgage £133,500 but have a redemption of 6k so in total would need to pay back 139,500 and then add sol and EA fees

The house is on the market for 135k but I know it will not sell at that. Houses round here won't sell easily anyway. So i'm looking at a realistic price of 120k if not less.

poppy10_2

papermoney wrote: »

Can you be repossessed without going bankrupt?

Yes .

silvercar

If you were repossessed and the property sold for insufficient to clear the mortgage + charges, the lender would chase you for the shortfall. Unusally they would give you some time to get back on your feet and then expect you to agree a repayment plan.

They won't make you bankrupt as that would right off the shortfall. If you went bankrupt after the repo', the shortfall would be written off in bankruptcy.

If you want to sell the property yourself you need to come up with the funds for the shortfall, generally by aranging an unsecured loan.

If you can't raise enough from a sale and can't find the difference you are stuck between a rock and a hard place. In repossession you would have greater costs that you will eventually have to pay -with interest.

papermoney

Thanks, i'm currently renting the property but it doesnt cover the mortgage and the propety is just a noose round my neck really. I could wait 2 or 3 years but unsure the situation would be any better.

Premier_2

Do you own your own the property you live in too? If so could you release some of the equity from that to fill the shortfall?

If you don't own the property you live in, would it be possible to move back into the house you do own? The interest on the mortgage could be less than £450 per month - probably less than the rent you are paying for another place.

papermoney

Premier wrote: »

Do you own your own the property you live in too? If so could you release some of the equity from that to fill the shortfall?

If you don't own the property you live in, would it be possible to move back into the house you do own? The interest on the mortgage could be less than £450 per month - probably less than the rent you are paying for another place.

The property I live in is my OHs - we can't move back to the other property because it is too small and our family has since grown.

I don't actual own the house we live in - it's in my partners name (he had it before we got together).

I have put my property in interest only and the rent is still £269 short a month which I obviously I pay.

I'm on maternity leave at the moment and can afford the £269 but it's the hassle of having the house really. I can't take the equilty out on OH's house really, as we have already asked and it's not doable.

mattis2k

So you can be repossessed without going bankrupt, but does this damage your credit rating?

MX5huggy

Your credit rating will already be in tatters before the repossession due to misssed payments on the mortgage.

mattis2k

Ok, sorry let me explain.

I currently own a house, i've never missed a payment in nearly 2 years, and have a very good credit rating, but I need to move due to the OH falling pregnant, in the coming months I need to move down her way, in our own place..I've been trying to rent my house out (for £150 a month less than my mortgage) but havent even had any viewers.

I'm thinking it's gonna be even harder to sell, i come out of my fixed term in April....so I was just wondering what my options would be, i live an hour away from OH, we cant really move her away from all her family and i cant really afford two properties...

Stumped....

Robert_Sterling_3

papermoney wrote: »

Thanks, i'm currently renting the property but it doesnt cover the mortgage and the propety is just a noose round my neck really. I could wait 2 or 3 years but unsure the situation would be any better.

I am confused when people say "I am renting a property" when in fact what they are doing is "Letting a property" to someone who rents it from them.

papermoney

Robert_Sterling wrote: »

I am confused when people say "I am renting a property" when in fact what they are doing is "Letting a property" to someone who rents it from them.

Sorry for the confusion, it was wording incorrectly, i am letting my property/ renting it out, i'm not actually in rented premises.

Sorry again, my mistake.