Selling a house in negative equity. Advice NEEDED!

Shell_S

I need some advice on a house of mine that is due to go on the market but will no doubt sell for less then whats left on the mortgage.

Me and my husband are currently going through a divorce at the moment and he is living in the marital home whlist I am living elsewhere.

We both just want rid of the house. It has been valued and it looks like it will sell for less then what we owe on the mortgage leaving us with a short fall.

What will the mortgage company do? Will they want us to pay the full amount whats still owed to them in one lump sum or will they let us carry on and pay so much a month?

There is no way whatever the shortfall may be that we will be able to afford to pay whatevers owed on the mortgage so what will happen??

I dont know what to do Im in desperate need of help as it is really worrying me!

Thanks a lot.

JA1000

Shame you can't hold on for a pick up in the market - is it a BTL property

G_M

No buyer will Complete a purchase unless the mortgage is paid off. So either you have to find the money yourselves before then, or reach an agreement with your lender to switch the outstanding amount from a mortgage to an unsecured loan, which they won't like.

They may agree though if the alternative is that you default on the mortgage, they repossess, and then they sell for less than the mortgage (though you will still owe them the shortfall).

talk to them NOW!

maninthestreet

How much is the shortfall likely to be??

pingu2209

Can you take a loan out (sainsburys offer loans at 7.9%) to cover the shortfall and between both you and your ex, you pay off the shortfall over a period of 7 years?

I would take the loan out before you sell your home, as homeowners tend to be deemed better risk. Then have the money in the bank waiting to add to the amount you get for your house.

Either way you have to pay off the mortgage company or you won't be able to sell your home to a buyer.

terryw

G_M wrote: »

No buyer will Complete a purchase unless the mortgage is paid off. So either you have to find the money yourselves before then, or reach an agreement with your lender to switch the outstanding amount from a mortgage to an unsecured loan, which they won't like.

They may agree though if the alternative is that you default on the mortgage, they repossess, and then they sell for less than the mortgage (though you will still owe them the shortfall).

talk to them NOW!

Excellent advice. Particularly "talk to them now" - they might just agree to the making this unsecured, as their potential loss is likely to be less as an owner-occupied house will often sell for more than a repossessed one.

VIGILANT22

pingu2209

It is not uncommon when people have reached this stage they are allready experiencing financial difficulties and trying to obtain further credit would be adding to problems..

http://forums.moneysavingexpert.com/showthread.html?p=21387117&highlight=#post21387117

silvercar

VIGILANT22 wrote: »

pingu2209

It is not uncommon when people have reached this stage they are allready experiencing financial difficulties and trying to obtain further credit would be adding to problems..

But they haven't mentioned any financial difficulties, they are divorcing and happen to be in negative equity. No credit card debts, no defaults, CCJs, no reports of not managing their money. Just falling house prices causing a problem.

I would get an unsecured loan each, so that there is no financial connection to each other in the future. Sell up and clear the mortgage.

Only problem is that this is a bad time to sell as you will be crystalizing the loss on the house. If you could wait a few years, prices may rise and the loss would disappear. The question is whether you could afford to wait. Could your ex take a lodger? Or could you let the property?

VIGILANT22

[QUOTE=silvercar;31878929]But they haven't mentioned any financial difficulties, they are divorcing and happen to be in negative equity. No credit card debts, no defaults, CCJs, no reports of not managing their money. Just falling house prices causing a problem..................:)

I would get an unsecured loan each, so that there is no financial connection to each other in the future. Sell up and clear the mortgage.

Only problem is that this is a bad time to sell as you will be crystalizing the loss on the house. If you could wait a few years, prices may rise and the loss would disappear. The question is whether you could afford to wait. Could your ex take a lodger? Or could you let the property?[/QUOTE]

Really!!...no problems!

http://forums.moneysavingexpert.com/...=#post21387117

Im 26 and I have 3 credit cards that I cant pay off and cant get a loan to pay them off either as my credit rate is so bad! WHAT CAN I DO? etc

The OP should make contact with Shelter/CAB or a similar agency

SouthCoast

Many people find themselves being asked to pay large sums by their mortgage lender after they have been repossessed or have handed in the keys on their house. Often people think that once they have left the house their liability ends.
However, this is not the case if the house is sold for less than the outstanding mortgage. The debt that remains is usually referred to as a mortgage shortfall. This also includes the monthly instalments and interest that has been added on to the debt until the house is sold, plus legal and estate agents’ costs.
WARNING
You can still be asked to pay back a shortfall a long time after you left the house as mortgage lenders may try to pursue a shortfall debt for up to 12 years afterwards.

http://www.nationaldebtline.co.uk/england_wales/media_information.php

poppy10_2

silvercar wrote: »

But they haven't mentioned any financial difficulties, they are divorcing and happen to be in negative equity. No credit card debts, no defaults, CCJs, no reports of not managing their money.

http://forums.moneysavingexpert.com/newreply.html?do=newreply&p=21387117

Shell_S wrote: »

:embarasse
Im 26 and I have 3 credit cards that I cant pay off and cant get a loan to pay them off either as my credit rate is so bad! WHAT CAN I DO?
The three cards total up to about 9k.
.