Charges Against Property

brian123321

i am sekking my house but i have 2 loans that have put charges against my house.. one of the companies has agreed to release their charge and told me that they and the other loan company cannot legally stop me selling the house and that the charge will not remain on the property once sold as it is with me and not the new intended owners and that they will have to make arrangements with me on an unsecured basis when th e house is sold to pay back their loan money as there is no equity in the house for them. is this true???

silvercar

If they have told you that, then I guess it's true! I wouldn't question it, just ask them to put it in writing and give the letters to the solicitor handling the sale. After all what reason would you have for doubting their word?

rjm2k1

brian123321 wrote: »

i am sekking my house but i have 2 loans that have put charges against my house.. one of the companies has agreed to release their charge and told me that they and the other loan company cannot legally stop me selling the house and that the charge will not remain on the property once sold as it is with me and not the new intended owners and that they will have to make arrangements with me on an unsecured basis when th e house is sold to pay back their loan money as there is no equity in the house for them. is this true???

I doubt it very much, my sister had a house purchase which fell through because the owner had more debts secured against it than it was worth. Your solicitor is under an obligation to settle the charge debts during the sale and if there isn't enough money in the house to do so you will need to negotiate with the lenders to have the charges switched to an unsecured basis, they may be somewhat reluctant to do so. Another option you may have is to get an new unsecured loan for the amount of the charges, or borrow more than you need in order to pay off the charges.

UK007BullDog

Seems a bit weird, why place a charge on your property in the first place if they are not going to use it to get their money back.

I bet your solicitor will have to pay them from the sale proceeds you get. So they will get paid after the main mortgage lender (if there is one) and you will get the rest of whatever is left over minus the solicitors fees. So yes, they are not stopping you from selling as long as there is enough equity in the property.

silvercar

OK, my last post was tongue in cheek.

I guess the secured lenders realise there is no equity in the property so there charge is limited. If the main mortgage lender repossessed, they would get nothing. You won't be able to sell without their agreement; you will need to agree with them an unsecured loan.

Defaulting on an unsecured loan would result in then going to court and getting a CCJ against you.

As you have said they "put charges on the house", I am guessing that they secured the charges after you took the loan out, so they know that you may be in financial difficulty and are protecting themselves. With no equity, they know that the charges won't be that useful. This is slightly different from people taking out a secured loan, where the loan lender knows there is sufficient equity in the property.