consolidation loan

jonnyT_2

hi,........i have a mortgage with 52k still owing , but also have a dreaded secured loan with 22k owing
(please dont give me the speech about how dum i was to take the secured loan out ! believe me i already know). my house is valued at 75k ....was wondering if the house sold for say 60k would i have the short fall to pay ?......and also what if i just stopped paying the morgage left my property and gave the keys to my 1st mortgage lender what would happen?????

chalkie99

It won't sell because you won't be allowed to sell it unless you make alternative arrangements to pay the shortfall - that is what "secured" means.

If you try and walk away your credit is shot, stopping you borrowing anywhere else, you'll run up all sorts of extra charges for missed payments, etc. and the house will eventually be sold for even less leaving you with a bigger debt.

Might be time to head over to the Bankruptcy forum for some advice.

Tixy

If your house sold at £60k (and the secured lender allowed that) then yes you would still have the shortfall to pay.

If you stopped paying the mortgage and hand back the keys - they will sell for a low amount and add on charges - you could well be left with a shortfall on the mortgage and the whole secured loan outstanding, allbeit unsecured.

(Dependant on your circumstances and how much debt you are left with at that point you might want to consider bankruptcy or an IVA and whether they would be an appropriate option for you.)

Edit - crossposted with chalkie