Mortage shortfall - pay monthly or offer settlement?

Waffle_On

I had a mortage with Halifax, due to moving in with my partner (we are married) sold the house but due to negative equity i was left with about £8k shortfall. For the last 12 months i paid £150/month leaving the current balance at around £6.2k. Halifax have sent me a re-assesment form to see if my current payment is reasonable but they also say that i could offer a settlement payment, all offers would be considered. The loan is interest free but i would still like to clear it asap. At current rates its going to be another 4 years.

The mortgage was in my name only although they are requesting my partners details, do i need to factor these in as it's my debt? I expect they will want to increase the monthly payment if my partners details are included.

Does anyone have any idea what kind of settlement i could offer which would be accepted ?

SouthCoast

From National Debtline:

Ask your mortgage lender to accept a full and final settlement offer of payment - sample letter (M3)

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=11_mortgage_shortfalls

bigadaj

You need to consider the consequences of this on your credit rating, though this may not be the best due to the negative equity and the interest free loan.

Thrugelmir

Not settling in full. Could leave a default on your credit record. So take care.

Waffle_On

bigadaj wrote: »

You need to consider the consequences of this on your credit rating, though this may not be the best due to the negative equity and the interest free loan.

There have been no missed payments, and no default. Everything has been paid as agreed at all stages. If my lender accepted an offer for full and final settlement, surely this won't count against me? We have plans to sell my partners house and move up the ladder in a year or two, so I really wanted to avoid any negatives on my credit rating.

I have read the link for the National Debtline, and it seems useful although some of it doesn't apply to our circumstances. I will call them next week and see if they are able to offer us any advice.

Thrugelmir

Waffle_On wrote: »

If my lender accepted an offer for full and final settlement, surely this won't count against me?

There are two aspects to consider.

Firstly for commercial reasons the lender is happy to accept settlement now and close the matter.

The second is that you have not met your contractual liability in full. So the lender will notate this on your credit record to forewarn other lenders.

Given that people do intentionally default on debt. I would expect the lender to notate the default on your credit record. Irrespective of your personal circumstances surrounding the case. There's nothing personal in doing this, just good business practice and policy.

bigadaj

Waffle_On wrote: »

There have been no missed payments, and no default. Everything has been paid as agreed at all stages. If my lender accepted an offer for full and final settlement, surely this won't count against me? We have plans to sell my partners house and move up the ladder in a year or two, so I really wanted to avoid any negatives on my credit rating.

I have read the link for the National Debtline, and it seems useful although some of it doesn't apply to our circumstances. I will call them next week and see if they are able to offer us any advice.

You may have agreed a repayment but no bank will voluntarily lend money at 0%, this will already have been recorded in your credit file I would expect.

Have you looked at your files with the three main agencies, as this may affect your decision.

Waffle_On

Thanks to everyone for their input.

We contacted National Debtline for advice, and used one of their template letters to make an offer for £4k in full and final settlement - on the basis that nothing negative would be put on my credit record. We had previously checked that nothing was already on there.

And the excellent news is that they accepted! We have already paid the money and that should now be the end of it! :j