Selling with a secured loan attached - please help!!

EmmaJason

Hi
This is my first post here although have been reading for a while.
We are about to sell our house and buy a new one but have a loan secured on the house we are in at the moment for 6000.
We will have about 35000 deposit to put on the new house out of the proceeds of this one but would like to carry the secured loan to another property and put all the proceeds into buying a better house.
When i phoned the loan company they told me it would take approx 8 weeks to sort transfer of the loan from this house to the new one once we have offered on the house we want which seems a long time to me but i have never sold before??? Does this sound right? Is it 'doable'??
Alternatively we can pay off the loan which I would only be able to do on completion of selling this one and getting the cash to do it with, but when i asked if it was possible to pay the loan on completion day they said no, it would have to be paid before that. This seems strange to me as I dont see why they would want the money back before the house is even sold.
Does anyone know anything more about this???
I would be very greatful for any advice!!
Thankyou
Emma

clutton_2

emma, may i suggest that you sit down and carefully read thru all the boring small print/terms and conditions of this loan - it will all be there. if there are any phrases you dont understand, i am sure someone here may be able to offer suggestions. good luck

lynzpower

there may be quite hefty penalties on settling this loan early, have a good look through your papers.

chugalug

Can you sell a property with a 'charge' on it?? I don't think you can. All charges on the property have to be settled before ownership can be transferred. As far as the loan company is concerned that property is their guarantee that they will get their money - the loan can't be 'secured' on nothing while a 'transfer' is arranged. You'd have to settle the loan in order for the sale to go through and then take a new loan to secure on the new property (providing there's enough equity).

Your loan agreement may say different so best to wade your way through them!! You can always get your solicitor to clarify for you if you can't get to grips with gobbledegook!!

lynzpower

Ahhh, that makes sense chugalug.

I suspect you can sell the house to repay the loan, but not secure the loan elsewhere.

thanks

EmmaJason

Thankyou for your replies.
I thought I'd update incase its any good to anyone later.

I can either pay off the loan with proceeds from the house sale or can transfer it to another property - loan company would come round and value the new property, charge us a few hundred in paperwork etc .

Therefore we've decided to pay off the loan on completion of our house sale. Seems a lot easier that way and clears a debt off!

Thanks again for the help!
Emma