Offer on House not quite what we hoped

brunettegirl

Had an offer on my house but is less than what the mortgage is by 5k can I accept the offer?

Does the mortgage company have the ability to stop the sale as it's not the full amount of the mortgage?

Do I have the option of paying back in installments or a lump sum on completion?

We are going into rented accommadation.

Anyone know about this or been in a similar situation?

thank you

pinkteapot

You can only accept the offer if you can afford to pay the bank the £5k on completion. On completion day your mortgage company will expect the mortgage to be paid off in full. It's called "negative equity" (when your house value doesn't cover your mortgage). I sold my first flat in negative equity a few years ago. My solicitor asked me to transfer the relevant amount to her a few days prior to completion.

If you don't have the cash available you could try ringing your bank and asking if they will give you a personal loan for £5k to cover it. This will be at a higher interest rate than your mortgage though.

puddy

if that is the problem, you need to consider whether you really need to sell, are there any other alternatives, such as re jigging the layout to give you more room, putting stuff in storage, accepting the size until you have paid more of your mortgage off?

brunettegirl

Staying put is no longer an option as we won't be able to afford the mortgage, I already have a suspended posession order on the property.

puddy

well i would guess then that you're in quite a good bargaining position with the bank as if they let it go to reposession they may not get such a good offer, meaning its in their interests to let you sell it at this price and give you either a personal loan or agree for the rest to be paid off in installments

if they let it go to auction, it may mean they get much less (which of course you'll still be liable for, but theres no guarantee they'll get the money)

pararct

The question is clearly is it worth taking the hit of £5,000 to get on with the rest of your lives?

Only you can answer that but if you are forced to give up your house through re-possession then the costs to you are very likely to be much higher than that. Don't forget you will need to factor in estate agents commission (if you have instructed one) and a conveyancing charge into this sale as well along with of course all you moving costs and the deposit you will need to find for your new rental..

You have my sympathies in that it has not worked out for you, many many young people have been 'suckered' into home ownership 'at any price' in the last few years by the vested interests....

silvercar

puddy wrote: »

well i would guess then that you're in quite a good bargaining position with the bank as if they let it go to reposession they may not get such a good offer, meaning its in their interests to let you sell it at this price and give you either a personal loan or agree for the rest to be paid off in installments

if they let it go to auction, it may mean they get much less (which of course you'll still be liable for, but theres no guarantee they'll get the money)

You are assuming that the lender possess something known as "joined up thinking". Generally they don't.