Who banks the profit on your house if you sell or are repossessed?

bo_rai_cho

Not looking to sell or be repossessed, but had a question, if say my houe is worth 200k and I have a 100k mortgage.

After 5 years the house is worth 250k, but I decide to sell or the bank repossess it, who gets the 50k its gained by?

I understand banks will want to sell it quickly and cheaply as they want to mitigate the risk for the loan, however lets say the house still sells for another 50k over the top, would you keep that 50k as you took the risk? Or does the bank cash it, so you only get back what payments you have put in?

dunstonh

Any excess over the debt and costs goes to you.

I understand banks will want to sell it quickly

And they price for quick sale.

PasturesNew

House sells for £250k
Mortgage of £100k settled
Any other debts settled (there would be extra costs in a repo such a all the fees and stuff they've racked up), auction fees, legals, commissions etc for any agents.
Whatever's left comes to you.

ACG

The bank will put it on the market and take the best offer they can get.
Typically where it is a repossession, the price will be lower.
You will also be incurring costs and interest by allowing the property to be repossessed meaning the excess in the current balance and the sale price could be eaten up.

If you can sell the property, I would do that but it gets to repossession.

Thrugelmir

bo_rai_cho wrote: »

I understand banks will want to sell it quickly and cheaply as they want to mitigate the risk for the loan

Often the property will be auctioned. As the lender has to be seen to be acting in the best interests of the borrower.

If the property isn't sold quickly then the debt owed will simply continue to mount. Likewise the property still needs to be insured/maintained etc. All comes at a cost.

bo_rai_cho

thanks all

badmemory

One locally at over 25% discount re equity release. And your neighbours may not like you much because it MAY devalue their properties.