how is negative equity paid back?

Just_Peachy

my partners house is approximantely £15,000 in negative equity and he is thinking of selling it as his ex (who he has the joint mortgage with) has move out and he is struggling to pay the mortgage on his own. If he was to sell the house and made a loss of £15,000, how is this paid back to the mortgage company? I realise that the negative equity debt will be split between both him and his ex, but do the mortgage company ask for it back as a lump sum or can it be paid over a period of time?

Thanks in advance

VIGILANT22

Paid at point of sale........

Gorgeous_George

Usually, both parties to the mortgage are jointly and severally liable for all of the debt. That is to say that it is not simply split between them.

Your man and his ex need to agree how this negative equity will be repaid. They could split it 50/50 and repay it with a personal, unsecured loan or from any savings that they may have. A loan from family members may be cheaper.

The bottom line is, it needs to be repaid if the house is to be sold - and probably before the lender allows it to be sold.

GG

lfc321

and any Early Redemption Charges, if applicable.

Ditch_Crawler

VIGILANT22 wrote: »

Paid at point of sale........

Is it really that simple?

Do lenders always prefer to go through the whole routine of "repossess/sell for next2nothing at auction/bankrupt the borrower/lose lots of money", or will they not sometimes realise that it might be better to allow the borrower to realise the best possible sale price for the property, and then negotiate a repayment deal for the amount still owing?

Just wondering...

Ditch

AnxiousMum

But the security on the mortgage is the house. If the house is sold......the security is gone - the bank isn't going to release anybody from the security of the home unless they know they are being paid back.

VIGILANT22

Ditch Crawler The question was "how is negative equity paid back?"

Which is at point of sale...........

Ditch_Crawler

VIGILANT22 wrote: »

Ditch Crawler The question was "how is negative equity paid back?"

Which is at point of sale...........

O thanks, now I know xx

Ditch_Crawler

AnxiousMum wrote: »

But the security on the mortgage is the house. If the house is sold......the security is gone - the bank isn't going to release anybody from the security of the home unless they know they are being paid back.

If there are no payments forthcoming, then they are not being paid back at all - it becomes a question of cutting their losses, rather than getting their money back as originally planned

WhiteHorse

The lender may go either way. They may, as has been pointed out, require the difference on the day or before (either from one or both of the debtors),or they may cut their losses and take what they can get.

VIGILANT22

Then they wouldn't be ALLOWED to sell the house......I am becoming tiresome of yr "ideas" in various post..