Can I sell for less than my mortgage???

InBigTroubles

Ok, I am in a horrible situation. Bought house at peak of property boom for £145,000. Have an interest only mortgage, variable rate.

The house has been on the market for £145,000 for 3 years with not one single viewer! (bad location - bad buy ).

If someone was to offer me, for example, £110,000 for my house, what are my options? Do I simply have to hold out until I get the full mortgage amount?
Please excuse my ignorance, im not financially minded!

TonyMMM

What is the outstanding amount on the mortgage ...£145,000 ?

You will need to clear the outstanding mortgage amount, otherwise your lender will not allow the sale.

You can either see if your lender has any scheme for carrying over negative equity to another property, or you would have to borrow the amount you are short from somewhere to make up the difference.

InBigTroubles

Outstanding amount is £138,500 as I paid some off when I received a small amount of cash.
In terms of borrowing the amount to make up the shortfall, would that just be a mattter of trying to get a loan from bank/building society? do they provide loans for this sort of thing?

It wouldnt be much use to me if the lender moved negative equity to new house, as I have no savings to use as a deposit to purchase new house, it will be back to parents for a while until I save a deposit!

inmypocketnottheirs

You can sell for whatever you like. If it's less than what you owe, your solicitor will require the balance in cleared funds prior to the sale going through, to cover the shortfall and any charges.

TonyMMM

InBigTroubles wrote: »

In terms of borrowing the amount to make up the shortfall, would that just be a mattter of trying to get a loan from bank/building society? do they provide loans for this sort of thing?

If you have the income to support the loan ? - and it will depend how big the shortfall is.

InBigTroubles

Well say for example the shortfall is £25k? Between the two of us our income is £52,000 p.a. My parents have said if necessary they will go guarantor on a loan.
Have we any chance of getting a loan to cover the difference if we dropped the asking price by £25k?

incher

Do you actually have to sell? Can't you just stay there for a while, and pay off more of the mortgage?

papermoney

A few years back I sold my property for less than I owed. I sold for 120k and I owed 135 plus 5k in redemption penalties. I rang my mortgage company who allowed me to sell at that price. I then entered an agreement with them to pay them back the short fall (it was put on their standard variable rate) it will take me about 5 yeas to pay it back though. It was the only way I could sell it.

hermum

Can't you rent it out until such times as it's worth what you owe again?

jockosjungle

What is the reason for the sale? Where are you going to live when its sold?

poppy10_2

hermum wrote: »

Can't you rent it out until such times as it's worth what you owe again?

That could be another 20 years