Secured loan-Sale of property

ethereal

Hi, I don't know if this should be here or in the loans section but we have a secured loan on our property but want to sell and pay off all our debts including the mortgage and loan and start from fresh. We are planning on renting a nice property instead of buying again. Do you think the loan providers accept an offer of early settlement using money from the sale of the property that their loan is secured on? If that makes sense?

getmore4less

unless the proceeds are insufficient to cover the debts it is unlikely they would accept a reduced F&F,

They could block the sale.

ethereal

Thank you for replying. What's F&F? (am I being dim?) We are fairly certain that even with the drop in house prices we can reach the value needed to cover most if not all of our debts. I just wasn't sure if they'd even consider letting us sell the house first and pay them back second.

Wickedkitten

Have you contacted them to get a repayment figure along with the cost of the early redemption charge if any?

ethereal

No, that is the next step I know but I didn't want to call them without a little knowledge first. I've read all the paperwork through again but it only deals with sale of property with purchase of new property or purchase of lower valued property. It doesn't say about sale of property full stop.

Richard_Webster

I better make the basic point if it has not been twigged yet. Anything secured on the property has to be removed on a sale. Second lender unlikely to remove its security unless it gets paid in full. There's no choice - if you want to sell you have to have the second charge/secured loan removed from the title.

In desperate cases sometimes they can be persuaded that it is better to get most of the money now than wait until prices drop further and it becomes more difficult for you to make up the shortfall - they might then agree to convert any outstanding balance into an unsecured loan that you continued to pay - but it is a big might.

ethereal

Hi Richard, thanks for your help. We would of course pay off all of the loan in full with the sale of the house, I didn't know if we'd be allowed to sell when not contemplating purchasing another property. I hope this makes sense?