Giving up House

davetheman

Discharged a 2 years and now want to give up house due to secured loan costing too much.

Do we need to inform the OR, have missed the first payment now.

It_can_get_better

What did the official reciever tell you when you were bankrupt? How did they let you keep it? Is there any equity in the house?

davetheman

Am in negative equity still, they let us keep it, but the mortgage and secured loan in total is around £1400 per month. Have a interest only mortgage and can't see us ever reducing. The deeds are still in the OR name as we never bought back

It_can_get_better

davetheman wrote: »

Am in negative equity still, they let us keep it, but the mortgage and secured loan in total is around £1400 per month. Have a interest only mortgage and can't see us ever reducing. The deeds are still in the OR name as we never bought back

£1400 seems a huge amount to be paying out. Is that your only expenditure? What's your income?

Can't really help you as i've no experience with mortgages, but thought i'd get the question ball rolling! Hopefully someone with knowledge will be able to advise you.

kepar

We gave our house up a few months after br, for the same reason as you. We informed the OR with the change of address when we moved into a rental.

Sorry to see that you are giving it up, but at least you will have some money spare after renting to get on with your life.

Hopefully you will be able to save a lot of that and maybe 4-5 years down the line possibly have a deposit to start again if you so desire.

sophistica

I will put in my tuppence...if you miss the payments and you are bankrupt, it may be a long time before you can get another mortgage. Have you thought of renting the place out and getting a tenant to cover your mortgage. That way if house prices rise you will recover your negative equity and start building up a nest egg. Otherwise you will have to rent for many years to come but with no asset which long term may appreciate in value. Maybe something to look into? I would also check on the latest mortgage rates and then ring your mortgage company and see if they will reduce the interest rate.

JoePublic

We gave our house back to Northern Rock after i went BR, we too were in negative equity and our repayments, inc the loan, were a ridiculous amount. Northern Rock offered to reduce a £1200pm bill by £58pm for 3 months providing that on month four, we repaid the std bill, plus the sum of the reductions... greeeeat!

Anyhoo, i simply rang the OR office and had a chat with the Lady dealing with my case, she just advised me to send them a letter detailing that we were returning the keys, date and sign it, and then leave it with them. She didn't even ask for a new address but we got in touch with them once we'd got sorted as you really don't want to mess about with the OR, they hold a lot of sway, be nice to them!

kepar

sophistica wrote: »

I will put in my tuppence...if you miss the payments and you are bankrupt, it may be a long time before you can get another mortgage. Have you thought of renting the place out and getting a tenant to cover your mortgage. That way if house prices rise you will recover your negative equity and start building up a nest egg. Otherwise you will have to rent for many years to come but with no asset which long term may appreciate in value. Maybe something to look into? I would also check on the latest mortgage rates and then ring your mortgage company and see if they will reduce the interest rate.

Another poster looking on their house as a money earner and not a place to live.

It is not the mortgage causing the problem,it is the secured loan. Will a mortgage company give you permission to rent without changing the terms to a buy to let?

You would have to rent somewhere a lot cheaper to make it worthwhile,
with all the expense and extra costs involved you could end up worse off.

silvercar

It is not the mortgage causing the problem,it is the secured loan. Will a mortgage company give you permission to rent without changing the terms to a buy to let?

You would have to rent somewhere a lot cheaper to make it worthwhile,
with all the expense and extra costs involved you could end up worse off.

Some lenders will allow you to let on a residential mortgage, particularly on a temporary basis.

You have to consider whether you can afford to rent elsewhere and pay for the maintenance, insurance, gas safety certificate etc, etc Remember tenants will expect that maintenance issues are dealt with promptly, not waiting until you can afford it. You also need to allow for voids between tenants and tenants who fall behind with their rent.

davetheman

My morgage is around 4% but the secured loan is a scary 9%, Cant see renting the property being an option

kepar

They put our SL rate up as rates were coming down.

Reading what Mervyn King is saying today mortgage interest rates are going to go up a lot, and so will SL rates. As stated earlier we got out, not an easy option but looking back now it was the right thing to have done. You are paying high interest rates, you are a prisoner in your home. Renting you could find a really nice place to rent for what you were paying in mortgage plus some of your loan and still have money spare.

Good luck to you.