selling my house - what happens to the loan I have secured on it?

alicebelle

I am basically selling up and will be moving to a rented property instead. I have a loan secured against my property which I will not be able to pay off with the proceeds from the house. What will happens to this loan? Do I just continue paying it (as I intend to and have done with no problem for the past two years) or will they demand the loan is paid back in full?

Any advice would be greatly appreciated!

homer_j_3

if it is secured you will have to pay it off or the loan company will not remove their charge registered against your property.

How short are you in terms of what will be left to pay when you have sold your house? You may be able to get an unsecured loan to pay the difference or you may be able to speak to your loan company to see if you can come to some form of agreement.

alicebelle

oh dear - thats what I thought. I'm going to be about £5k short. Suppose I need to talk to them very nicely!

So does the mortgage lender notify them that I am about to close the account?

thanks by the way for the fast response!!!

homer_j_3

no, your solicitor will request a settlement figure

silvercar

You need to sort this out sooner rather than later, without the secured charges' agreement to remove the charge the sale can't proceed.

alicebelle

ok thanks for the advice. I'm really worried that I'm not going to be able to sell due to this. I really cant afford to pay it off so the only choice is to to get another loan (this time not secured) to pay it off. My credit history isnt good so I'm worried about trying to get this.
Suppose I'd better start cracking!!

mightymouse

Hi

How much is your mortgage and how much of your loan would you be able to pay off in a lump sum leaving the 5k outstanding.

Why are you selling to move into rented?

It depends on how tough you want to be, you could say to 1st charge that if they do not allow the sale to go ahead then you will hand the keys in and move into rented property then let them work it out with the second charge as to costs in repossession versus sale.

The secured loan might turn into an unsecured loan for the remainder of the term.

alicebelle

Hi
well to be honest I'm not moving into rented (just said it cause its easier!!). My current house is mine but I am now with a partner and we are looking to move into a bigger place. The mortgage will be in his name only as putting my name on it will practically decrease the amount we can have due to my credit history!! (obviously we are drawing up a contract to say if things turn bad between us, I am legally allowed come back!).

I'm just going to have to find a lender willing to give me the £5k unsecured....I dont think that the current lender will allow me to change to unsecured - Welcome Finance - rip off merchants. If I can get away from them entirely, that would be great!!

:T

silvercar

In that case the easiest maybe for your partner to lend you the 5k, presuming he can borrow the money from somewhere. You would just need to acknowledge this when drawing up your agreement.

mightymouse

Hi

Thanks for the additional information, my response assumed you had a first mortgage with a lender and a second charge but it seems its all with welcome finance is that right?

Please say if you can how much the total amount is that will leave a shortfall of 5K.

Also I did not quite understand your comment re contract when moving in with your partner and being allowed to come back.

However if it is all with welcome then I am confident they will let you sell provided it is explained properly to them.

You will then need to discuss continued payments.

My comments might come in for criticism from some but try and post results.

alicebelle

yeah I suppose - I just dont really want to have to ask him - pride and all that!! Maybe I need to swallow the pride...
Not sure if he will be able to get the money though - not when we are just about to do all of this. Bad timing. If only I had of realised the long term implications of secured borrowing!! Didnt even think about it at the time!