Selling home for less than I owe???

buckolfc

My home is on the market for £125,000, which is the same amout as what I still owe on my mortgage.

I want to sell ASAP as the we have grown out of the house and need more room.

The house has been valued by two estate agents and they both agreed it was worth around £130,000 ( originally I had it up at this price but reduced it 6 months ago).

It has been on the market for 12 months so it is obviously overpriced and I want to reduce the price!

Now for my dilemma! I am thinking of dropping it to £120,000 so would need to make up £5000. This £5000 makes up a big chunk of the deposit for my next house.

Can I sell for £120,000 then set up an arrangement with the mortgage company (accord) to pay this amount off in instalments?? Thus keeping my deposit in tact!!

Thanks for the advice!

G_M

No. You need to remove the Charge (mortgage) from the Title when you sell. No buyer will acept the propety with your mortgage still registered!

So
1) you find the missing money from your savings
2) you borrow it elsewhere
3) you get the lenders agreement to 'write off' the money owed (Unlikely!)

I asume you've factored in the estate agent fees, legal fees etc?

mum2one

what are the houses near you selling for, may give an idea of the market place

buckolfc

mum2one It's difficult to gauge the house prices in the area as local knowledge of the streets and sub area does play a factor. I would say it is competitively priced if it was £120,000.

Foxy-Stoat_3

Ask for a redemption figure now and make an overpayment to reduce the balance to just below your new asking price.

pinkteapot

Foxy-Stoat wrote: »

Ask for a redemption figure now and make an overpayment to reduce the balance to just below your new asking price.

No real point doing this. OP can just sell for less than is owed and pay the shortfall on completion.

That way they can keep the difference in their bank account for longer, and won't incur any fees that apply if their overpayments are currently limited (paying off negative equity on completion doesn't count as an overpayment).

Rambosmum

I take it you are selling up and moving in to rented rather than buying somewhere else?

davidmcn

Rambosmum wrote: »

I take it you are selling up and moving in to rented rather than buying somewhere else?

A rented house with a deposit of more than £5,000? I think they're talking about a subsequent purchase, which seems tricky in the circumstances...

Foxy-Stoat_3

buckolfc wrote: »

This £5000 makes up a big chunk of the deposit for my next house.

OP is buying another house.

Worth noting that the redemption figure is normally higher than the balance you can view online. Even if the asking price is £5,000 under the current balance, the sale price maybe less and you need to take into account all the fees and charges to move.

As long as the OP has done all the sums correctly and counted all the pounds there will be no nasty shocks.

Rambosmum

davidmcn wrote: »

A rented house with a deposit of more than £5,000? I think they're talking about a subsequent purchase, which seems tricky in the circumstances...

OP could be moving to rented before buying next place.

The reason I ask is that my mortgage is portable - if I buy a new place the mortgage moves, and if I need more money they set up a second mortgage for the extra rather than me paying off the first mortgage and setting up a second one for the full (larger) amount. I spoke to the bank about this at the weekend as we are considering moving up the ladder, I thought as part of the selling/ buying process one mortgage is paid off and a new one started, not so with the one we have. If the OPs mortgage is the same as mine then as long as he is buying a new house which is more than the old one it wouldn't be an issue.

Obviously if the mortgage doesn't work like mine does then it isn't an option, but it is worth exploring.