Welcome finance secured debt. Porting mortgage?

redbananas

Hi all, firstly I have used this site on many occasions and think it is absolutely superb. Unfortunately on this occasion I am having to post a new thread to try and get some advise.

My questions is,

We have a secured loan from Welcome finance(We know!) of £15000(outstanding balance). We have a decision in principle from Nram to port our mortgage to another home.

Mortgage £66400 Expected sale price £78000.

What happens to the secured debt when we move? Do nram just transfer the mortgage and the equity to the property? If 'yes' does the secured debt become unsecured?Also what happens to the charge on our current property.

We do have money to add to a deposit so we can stretch to a house around £85000.

Can Welcome block the sale?

Thank you in advance.

Thrugelmir

Welcome will have to agree to the transfer of their charge as well. The sale of your existing property cannot go ahead without this.

redbananas

Thank you. Is transfer of a charge a usual occurrence? Being Welcome and hard to get a reponse out of will this be something we can do while conveyancing is going on? Or will we need confirmation before hand?

Just one other question.

Can a secured debt be settled for the remainder of the equity in the house? If we sold at £78000 we would have £12000 currently owing £15000? I think what I am asking is would they except a full and final offer at the above sort of figure? I relise it is hypothetical.

Thanks again it is very much appreciated.

Thrugelmir

Transfer of charges between properties isn't unusual. Your solicitor will handle this on your behalf. This will incur you additional costs. Welcome will require their costs covered as well.

Secured lenders are unlikely to accept F&F settlement. Ultimately they have your property as security. So can wait as long it takes to recover the debt owed.

Are NRAM aware of the secured loan?

mrginge

Won't op need welcome to sign a deed of postponement (or whatever its called) as well?

Thrugelmir

mrginge wrote: »

Won't op need welcome to sign a deed of postponement (or whatever its called) as well?

Welcome Finance will have to do so.

redbananas

Thank you, Nram are aware of the secured debt and have agreed in principle to the porting.

What is op? and a deed of postponement?

What would be the advise when contacting Welcome. We have sent several recorded letters including an sar which has gone past the 40 day deadline.

Thanks

Thrugelmir

OP = You - Opening Poster

Deed of Postponement = Order in which charges are discharged with equity from the sale of the property. Hence why secured loan rates are higher. As lender incurs the risk of not receiving full settlement where there's negative equity.

kingstreet

You seem to have a fundamental misunderstanding about what happens here.

You will agree to sell your property for a particular price. If you do not raise enough to repay the secured debt, you will need the agreement of the secured creditors to a sale at that price.

A mortgage is the deed which ties a loan to a particular security, in this case a property. You have to repay the mortgages on the property on completion day to provide "unencumbered title" to the purchaser's solicitor. You cannot transfer a mortgage from one property to another.

Your lenders, NRAM and Welcome Finance, may agree to a continuation of the lending you currently have, secured on the new property, but there is no guarantee they will lend to you again. Porting is the transfer of a rate and its terms and conditions to a new mortgage if you qualify for that mortgage by satisfying the lender's terms and criteria.

In the first instance here, you need both lenders permission and terms for repaying your existing borrowing. For example, NRAM will permit you to port its standard rate to a new mortgage, provided there is no increase in the borrowing and the loan to value is no greater than it was before.