Selling a house in negative equity - the shortfall to repay the mortgage?

HurdyGurdy

Just a wondering, really. This is the potential situation for a friend of mine, and we were wondering what happens.

She and an ex partner have a joint mortgage on a property. The relationship has broken down and she wants to get away from the joint mortgage.

The house is in negative equity.

If they sell and don't get enough to repay the mortgage - what happens then?

She has nothing, apart from her car.

No idea what assets he has, but not thought to be much.


Would they be expected to take out loans to make up the shortfall? If they are unable to do this - what then? How would the mortgage company get their money?

Annisele

The mortgage lender won't allow them to sell unless they make an arrangement to repay the money.

An unsecured loan *might* be acceptable to the lender; it would depend on the circumstances.

ValHaller

Annisele wrote: »

.... An unsecured loan *might* be acceptable to the lender; it would depend on the circumstances.

If they can get an unsecured loan elsewhere, the money from that loan *will* be acceptable to the lender.

kingstreet

They need to contact the lender if they want to make an arrangement with that lender to sell with insufficient funds, otherwise completion won't be permitted.

If they wish to raise the shortfall a different way, as long as they have enough money to get the charge released at completion, the current mortgage lender won't need to know,