Leaving the country...what to do about mortgage...?

Wizzle_Tweakly

Hello, all:

The other half & I are moving our family to the States and are getting ready to put our house up for sale. We bought the house for $130,500 in 2007 and have recently had it valued at £120,000 by several estate agents in the area.

If we get £120,000 for it, we'll be faced with a deficit of £10,000 which we'll have to carry over with us in some form.

My question is this: what would the repercussions be if we simply handed the house over to the mortgage provider right before we left instead of trying to sell it? What if we just said "Here you go, here's the keys, you can have it."

htb

Did you have a 100% mortgage? Is there no equity in it?
Basically, if you are not paying back the amount you borrowed, my understanding is that you would be defaulting on the mortgage. They may repossess and sell it for way below the £120k market value and you will be liable for the rest of the outstanding amount borrowed which could be more than 10k. (They usually sell way below the market value). This may be useful link?

http://www.payplan.com/debt-library/mortgages-mortgage-shortfalls.php
Any chance of changing it to a buy to let until the market picks up (goodness knows when?) or selling it at market value and aking out a personal loan to cover the 10k (atleast you wont have the mortgage over your head?)

Wizzle_Tweakly

Yes, it was 100% mortgage.

What if we left no forwarding address and they couldn't find us?

(Only joking...I think...)

hcb42

have you been on interest only as well? Otherwise dont understand why you havent paid a penny off....

can you not find a way to pay off the 10K.

Full amount would be due on completion. If you cannot do that, you cannot complete on a sale.

Wizzle_Tweakly

Not interest only. Been making payments of £800/month since we took possession.

Part of the mortgage was an unsecured loan; might it be possible to pay off the mortgage part and roll the shortfall into the loan portion?

Currently owe £128k in total (mortgage + unsecured loan).

BKAT_9

I am so confused by mortgages - the above looks like you have paid £2500 off the cost of the house in 4yrs however have paid £38,400 back to the bank - is interest really that much?! (please be kind I am probably missing something really obvious!)

DUTR

BKAT_9 wrote: »

I am so confused by mortgages - the above looks like you have paid £2500 off the cost of the house in 4yrs however have paid £38,400 back to the bank - is interest really that much?! (please be kind I am probably missing something really obvious!)

Yes indeed eg
interest 5% hence 0.4166% per month
if the capital was £130.5k then £544 of the monthly payment is interest.

HappyMJ

Wizzle_Tweakly wrote: »

Hello, all:

The other half & I are moving our family to the States and are getting ready to put our house up for sale. We bought the house for $130,500 in 2007 and have recently had it valued at £120,000 by several estate agents in the area.

If we get £120,000 for it, we'll be faced with a deficit of £10,000 which we'll have to carry over with us in some form.

My question is this: what would the repercussions be if we simply handed the house over to the mortgage provider right before we left instead of trying to sell it? What if we just said "Here you go, here's the keys, you can have it."

If you did it your way then do not return to the UK for about 12 years after the sale of the property. The debt will then be written off. You really must like the states and not want to return otherwise you will not only pay the shortfall but all the fees and charges as well. Your house will probably sell for under £100k at auction so a potential big bill.

You could also declare bankruptcy before you go.

silvercar

Wizzle_Tweakly wrote: »

Not interest only. Been making payments of £800/month since we took possession.

Part of the mortgage was an unsecured loan; might it be possible to pay off the mortgage part and roll the shortfall into the loan portion?

Currently owe £128k in total (mortgage + unsecured loan).

The unsecured loan part would be over a shorter time and capital and interest, hence the higher payments than some posters have calculated.

You can pay off the mortgage and keep the unsecured part going without an issue. The downside is that the interest rate on the unsecured part will jump up dramatically.

Better to disappear abroad with a loan that you can't pay than a mortgage unpaid or a repossession behind you.

If you are following the "find me if you can" approach, an unsecured loan becomes time bared (if not acknowledged) after 6 years rather than the 12 for a secured loan or mortgage.

Thrugelmir

Wizzle_Tweakly wrote: »

My question is this: what would the repercussions be if we simply handed the house over to the mortgage provider right before we left instead of trying to sell it? What if we just said "Here you go, here's the keys, you can have it."

Try obtaining credit in the USA. The banks use the same credit agencies as in the UK (Experian, Equifax, etc). Your credit rating will go with you.

Settle the debt from savings. Otherwise the consequences could be with you for a very long time.

amblondon

While personally I find the OP's idea of high-tailing it overseas reprehensible, since there is no reciprocal debt agreement between the US and the UK (there is between the UK and Canada) the OP's debts here won't follow him / her to the US. In the US, the credit system is linked to social security numbers. No social security number = no credit history. It will be like starting from scratch, even though Experian and Equifax are two of the three credit bureaus, I don't think they are allowed to share info.