Worried about first active mortgage

macbabypam

OH and I have a joint First Active Interest only Mortgage and the property is in negative equity.

We haven't heard anything fom them since BR in September but guess OR just getting round to informing everyone.

Am worried that they may change our interest only mortgage to a repayment one as they think we are a bad risk. Also can anyone clarify that as long as we keep up repayments that they won't make us sell as we owe more than house is worth...

What do you think ?

macbabypam

sorry for the bump but I'm really stressing about this

National_Debtline

Hello there,

I take it you are still living in the property and that the mortgage is up-to-date. As a mortgage is secured to the property it is not a debt which would be included within the bankruptcy. The technical term is that it is not a 'proveable debt'. So long as you are able to keep up-to-date with the mortgage there should not be any changes - although you may wish to check the terms and conditions of the mortgage to see if there are any particular clauses. I have never come across a mortgage lender changing the terms of a mortgage simply because their customer has become bankrupt. Lenders can change the interest rates although generally that happens if there is a change to the Bank of England base rate.

Given the information provided your most likely outcome is that nothing will change so long as you continue to pay the mortgage. It is highly unlikely that they will want to have the property sold.

There is a good guide to bankruptcy and the home via the following Government website:

http://www.bis.gov.uk/assets/insolvency/docs/publication-word/what-will-happen-to-my-home.doc

I really hope this information is useful.

Best wishes,

David @ NDL.