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

movingforward2010

im the same, welcome finance told me to put my house up for sale, then when i had an offer, to ask then to put the difference to an unsecured, but they couldnt tell me if i would be accepted for a personal loan,

catch 22, and a complete waste of everyones time

alicebelle

hi - response to mighty mouse!

What I meant was that I have a mortgage and the loan I am talking about with welcome finance is a second charge on the property - separate from the mortgage lender.

moving in with my partner and having come back - I meant that the mortgage is going to be in his name alone although I will be contributing to the mortgage payments and running of the house - so we have agreed to draw up a contract between us so that if we ever did split up in the future I would be able to get some money back etc.

the shortfall I am on about is that by the time I have paid my half of the solicitor fees for the new house and I have paid the selling fees of the current one, I wont have any money left over. I simply wont have £5k to pay off the secured loan so need to get an unsecured loan before we complete the sale.

does that make more sense?

mightymouse

Hi and yes now very clear.

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.

My previous comments stand but you need to be a bit tough to do it.

If the shortfall is with the 2nd charge (which it is) the 2nd charge will not want the responsibility or cost i.e fees mortgage interest to 1st charge and cost of sale (legal, estate agents etc) in selling your property in repossession which the 1st lender will expect them to pay.

The second charge will agree to the sale going ahead, reassure them that you will pay the ongoing loan.(its only 5k and they cannot do much else).

You could see if your solicitor is up to doing the work for you.

The 2nd charge knows your credit history and will try very hard to accomodate you I do not expect you to use this next comment, but I do which is to say 'that after you have handed in the keys you will go bankrupt' which tells them exactly what the score is.

good luck and if you can post the outcome whatever you decide..

alicebelle

Not sure I have the balls to do that!!! I understand what you are saying but I'm not sure I could do it.

I actually contacted Welcome finance today to ask them if I can change the arrangements of the loan - ie change it from a secured to an unsecured....they said no! Basically said the only way I could do that was by getting a loan with someone else to pay it off otherwise they would ask the solicitor for the balance when sorting the monies when the house sold! I cant believe how unhelpful they have been. I have been paying the loan for 4 years never even been late let alone missed a payment. and they wont even entertain helping me.

feel really miffed at the moment.

mightymouse

Hi

ok maybe its easier to post.

There is the fact that the second charge will not want the responsibility or costs associated with possession.

Your solicitor should have no problem saying this to the first and second charge that if you do not sell (with / without Independent valuation) there will be a price to pay.

It is difficult to see the bigger picture when you are in the middle of it but I would not think it is in you interests to keep the property if there is a genuine buyer.

alicebelle

But if I was to do that, what would happen to my credit history??would it affect it? Would it register that I had threatened to become bankrupt?

feeling scared!
)

mightymouse

Your credit history will only be affected if you default (i.e do not pay), technically you are changing from secured to unsecured but with the permission of the second charge.

I did not say you were going to go bankrupt just a reality check for the 2nd charge but let your solicitor do it, he may charge you a little but not a lot.

No you will not affect your credit rating by 'threatening'.

I am not sure I can really add to what I have said.

Try it and see what happens it really is quite simple...........

Any second charge could exceed the market valuation (i e if property values fall) and the lenders have to be realistic / responsible or face the consequences.

mightymouse

Hi

Basically said the only way I could do that was by getting a loan with someone else to pay it off otherwise they would ask the solicitor for the balance when sorting the monies when the house sold

I have had another look at this and it seems they will let you sell but not on your terms.

craigmc

I am in the same position, how did you get on?