Voluntarily Surrendering my house

Martyboy1

Hi, I am in the process of surrendering my house back to the mortgage company, we have got a rented house now and will be moving in a couple of weeks. I am going to write a letter to the mortgage company advising them of this with the keys, and will empty the house and move into the rented house. what will the repercussions be of this?, will they just sell the house and any shortfall ask me for it?
What about council tax bills etc, i just presume i will contact the council and advise them of my new address to pay the council tax on the new address.
Thanks

BoGoF

Suggest you have a read at this thread before going down that road

https://forums.moneysavingexpert.com/discussion/3742543

Glennst

I presume you are in arrears / default of your mortgage and facing repossession ?

Have you had any communication with the lender ?

Is the shortfall considerable, ie worth the lender pursuing you via the courts ?

In a nutshell yes, they will sell the house once they have legal title to do so, and then pursue you for the shortfall. Depending on the figures / relationship they can, and may, look for Bankruptcy of all named debtors.

Probably not the best way to go, but Im sure a tough situation for you.

Martyboy1

Thanks,

I have spoke to the lender who is not interested and just wants the mortgage paid and arrears cleared otherwise they will repossess the house.

I thought this may be the easiest solution as cannot afford to live there anymore, and have now got a rented house for a fresh start.
It may not be a bad thing if they ask us to go bankrupt cos at least it will clear all other debts to

BoGoF

Is there any equity in the house?

Martyboy1

nope it will be negative equity as we also have a secured loan against the property, which we also cannot afford to pay.

BoGoF

As long as you are aware what bankruptcy entails then seems it is your only option.

Thrugelmir

Suggest you make an appointment with your lender. Walking away and posting the keys won't solve your problems. At least deal with the matter in a responsible manner and negotiate a sensible exit strategy.

Martyboy1

Yes I think this is my only option, I am a little vague on bankruptcy, what are the main things this entails.
Obviously I wont own my own house, do not own a car, all I have is my possessions, am off work due to sickness and only get ESA from benefits, and my partner earns £1000 a month.

amclauchlan

Have you thought about renting out your house to pay the mortgage, not ideal but might be better than losing it? I think you need permission to let though, so you would need to discuss with your mortgage lender. It would depend how much the rental prices in your area for similar properties whether it would be an option?

Martyboy1

Thanks, but looked at that option the rent would not cover the mortgage and the secured loan, and also would still have to pay rent for somewhere else to live!