Handing Home Back to Mortgage company

Karl_S

Hi All
I'm new to this and need advice.
My wife has an IVA due to her ex husbands debts,She has a mortgaged property which we keep up with the monthly payments,However her home has fallen into disrepair over the 17 years she has owned it,there is no equity in the property it is in fact in negative equity to the tune of £25k.

I am unable to help her as i am disabled and only receive Personal independence payment.

As previously said the house has fallen into disrepair and need a new roof,re pointing and other jobs totaling some £15.000

we are unable to remortgage.

Has anyone ever just handed the keys back to the mortgage company? and if so what happens?

molerat

Not really something for DT, better posting in the DFW board. Loads of help and "been there" advice available.

Davesnave

Karl_S wrote: »

Has anyone ever just handed the keys back to the mortgage company? and if so what happens?

They sell it and if there's a shortfall they keep coming after you for the debt.


As your wife, she probably has a financial interest in your house now, so a charge might be put on that. In other words, should you sell, the debt would be repaid before either of you saw any of the proceeds.


You'd be better posting on:
https://forums.moneysavingexpert.com/forumdisplay.php?f=16


where you could check if the summary I've given above is 100% accurate. There are solicitors on there who might have something additional to say.

dealer_wins

Its not as simple as "handing back the keys", they didnt give you the keys they lent you money, and will seek to recover that via selling the secured asset (the home) and pursuing you if there is a shortfall.

And if you let the mortgage company sell the home you will get rock bottom auction prices, hefty fees, and be left with more shortfall.

seven-day-weekend

The mortgage will still need to be repaid, and, as others have said, the mortgage company will sell it for rock bottom and still pursue your wife for the shortfall.

I would do as another poster has suggested, post on the debt-Free Wannabee board, they may have further advice for you.

Davesnave

This 'rock bottom' isn't giving the OP a full picture. The price achieved might be very low, but equally, in some cases not as poor as 'rock bottom' suggests.

If the house is in a mortgagable condition, it would be put on the market via a normal EA, who would market it for a set amount of time as a repossession. People would offer in the usual way and the highest qualified bidder would probably get the property. Even if the house was not mortgagable, it might still be offered similarly to 'cash buyers only.'

However, to save time, houses with structural problems are often sent to auction, where they might sell for less than the market rate, but there is still an element of competition for those offering a potentially good return on repair and refurbishment.

Cornucopia

Moved to the House Buying, Renting and Selling subforum.

oystercatcher

What part of the country gives negative equity after 17 years ?
Property where I live has trebled in value in that time .:huh:

markin

Have you not been renting it out for 17 years? Could you still get a tenant in it to help pay for a roof patch job?

Crashy_Time

oystercatcher wrote: »

What part of the country gives negative equity after 17 years ?
Property where I live has trebled in value in that time .:huh:

Nightmare. Hopefully Brexit will put a stop to these sorts of rises.

AdrianC

Karl_S wrote: »

She has a mortgaged property which we keep up with the monthly payments,However her home has fallen into disrepair over the 17 years she has owned it

Sorry, are we talking about one property or two here?

there is no equity in the property it is in fact in negative equity to the tune of £25k.
...
As previously said the house has fallen into disrepair and need a new roof,re pointing and other jobs totaling some £15.000

If that value takes account of the condition, then all is fair. She's in -ve equity to £25k. If, otoh, that's what it'd be in good condition, then the -ve equity is nearer £50k.

What proportion of the debt is that?

Has anyone ever just handed the keys back to the mortgage company? and if so what happens?

They sell it. They deduct their costs. They credit whatever's left to the mortgage account. The remaining balance... remains. Whichever way it goes.