Charge on HMLR dicovered in HIP

Gareth78
Gareth78 Posts: 58 Forumite
Hi all, I hope this question makes sense!

This post is also in buying/selling/renting forum, apologies for doubling up, wasn't sure where to put it.

Back in 2004 I took out a £7000 loan with Black Horse Finance for home improvements. At the time I just signed the paperwork and took the money, did my improvements and thought nothing of it.

However, now I am in the process of selling my property, I have just recieved the completed HIP where I have noticed a charge with HMLR made by Black Horse in 2004. Checking the Black Horse paperwork, I now realise that the loan was secured against the property although I don't really remember asking for a "secured" loan.

So really, my question is this.... when I sell, am I obliged to pay off the outstanding monies to Black Horse (I am not re-buying and therefore cannot switch to charge to my next property).

When I sell and have paid off the mortgage, along with other related fees, i will not have enough (about £5k not enough) to pay it off, so what happens? Can i try and switch it to an unsecured loan? Will they force me to pay it off?

Thank you all in advance for your answers.

Gareth

Comments

  • Bob_the_Saver
    Bob_the_Saver Posts: 5,610 Forumite
    edited 31 August 2009 at 8:15PM
    Gareth78 wrote: »
    Hi all, I hope this question makes sense!

    This post is also in buying/selling/renting forum, apologies for doubling up, wasn't sure where to put it.

    Back in 2004 I took out a £7000 loan with Black Horse Finance for home improvements. At the time I just signed the paperwork and took the money, did my improvements and thought nothing of it.

    However, now I am in the process of selling my property, I have just recieved the completed HIP where I have noticed a charge with HMLR made by Black Horse in 2004. Checking the Black Horse paperwork, I now realise that the loan was secured against the property although I don't really remember asking for a "secured" loan.

    So really, my question is this.... when I sell, am I obliged to pay off the outstanding monies to Black Horse (I am not re-buying and therefore cannot switch to charge to my next property).

    When I sell and have paid off the mortgage, along with other related fees, i will not have enough (about £5k not enough) to pay it off, so what happens? Can i try and switch it to an unsecured loan? Will they force me to pay it off?

    Thank you all in advance for your answers.

    Gareth

    Assuming that the black Horse loan is still outstanding.

    Well to start with their charge will come after the mortgage and before
    "other related fees" unless also secured. So if you sell, the Mortgage gets paid for sure, the charge gets paid (assuming sufficient funds) and you're left to pay the Solicitor and Estate agent etc. I think Lloyds can stop the sale if funds are not enough to pay their charge but I don't know for sure.
    Time to take proper advice I would think. Maybe (initially) not from the solicitor you won't be able to afford to pay)!!! Then Maybe time for some Horse whispering, but you do need to sort this.
    The whole point of a charge is to secure their funds.

    Good luck
  • Gareth78
    Gareth78 Posts: 58 Forumite
    Thanks for you speedy answer Bob, I was hoping not to see a reply like this but knew deep down that this would be the answer!!

    Thanks again.
  • Bob_the_Saver
    Bob_the_Saver Posts: 5,610 Forumite
    Gareth78 wrote: »
    Thanks for you speedy answer Bob, I was hoping not to see a reply like this but knew deep down that this would be the answer!!

    Thanks again.

    Check it all out but I'd be surprised if I was far adrift.
  • PNPSUKNET
    PNPSUKNET Posts: 4,265 Forumite
    as bob says been honest charges are added for a reason, so that the lender gets their money
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