Can I sell with a secured negative equity loan?

mikeb222

I have a secured loan of £18,000

This takes me over my property valuation by £10,000

Due to debt problems I would like to sell but would the loan company allow me to do that, as obviously they wouldt get all their loan back from the sale, they would be owed about £6000?

Also, why are loan companies allowed to provide loans over 100% of the valuation as this has really left me in serious trouble?

homer_j_3

I do not want to answer the last question because you have a responsibility too when you take out a financial commitment. If the house had increase in value massively, it may not have been an issue and I am guessing that thought was somewhere in the back of your mind when you did this loan.

Anyway onto the main question. Your house cannot be sold as it is unless you can agree for the loan to be made unsecured because they will hold a second charge on your house and this will become first charge when the first charge is repaid. The mortgage co of the buyer of your house would not be able to register the charge on the property and therefore your solicitor will not allow it to go through.

So what can you do? You can ask to convert it to an unsecured loan.

Who is the loan with?
When did you take it out?
Did you get any PPI added to the loan?

mikeb222

Yes, I agree with you. I DID responsibility and no-one forced me to do it, but I certainly wasnt made aware that I couldn't sell the property. It only just came up as an issue cause I am thinking of selling now.
I still think you shouldnt really be able to borrow more than 90% of the value of your home, even though I did it myself.
Would solve a lot of problems.

Surely they have a responsibility to make sure I understand the situation, which I obviously didnt.

Anyway, thank you for your reply, at least I understand the situation a bit better, doesn't look to promising as I cant imagine them turning into a non secured loan. Wouldnt they run the risk of losing that money?
How could they ensure I would pay once the house was sold?

My original mortgage is with GE home lending and my secured loan is with black horse finance
The loan was taken out 2 years ago on a 10 year period
I initailly had PPI but cancelled after 1 year. Currently trying to get the 1st years back to no avail.

Rabiddog_2

The value of a house is not set in stone and obviously even between two estate agents there can be big differences. Add in the fact that values are falling at present and its easy to see how people could borrow more than their house is "worth."

Surely they have a responsibility to make sure I understand the situation, which I obviously didnt.

I would agree but how is it obvious that you didn't know what you were doing? are you mentally disadvantaged or of unsound mind? (ie not a competent adult). If this is the case you should have your carer make all your decisions for you.

mikeb222

Rabiddog wrote: »

The value of a house is not set in stone and obviously even between two estate agents there can be big differences. Add in the fact that values are falling at present and its easy to see how people could borrow more than their house is "worth."
I would agree but how is it obvious that you didn't know what you were doing? are you mentally disadvantaged or of unsound mind? (ie not a competent adult). If this is the case you should have your carer make all your decisions for you.

You wouldnt understand.
Looking at your previous posts you have never got into debt, obviously.
You then stalk this forum, being sarcastic to anyone unfortunate enough to get themselves in debt and not understand the rules.

It probably makes you feel superior in some way.
If I had wanted sarcasm I would have asked down the pub.
So you can stick your advise you know where?
Muppet!

CLAPTON

You need to ask them what the position will be.
If they wont then, your only real options are getting another loan to transfer the Black Horse loan or stay put.

mightymouse

Hi

If there is no equity in your property how would selling help you with your debt problem as presumably you would need to rent and still not be able to pay off your loan.

Concentrate on making payments to your mortgage provider and pay the secured loan with whatever is left over.

It is unlikely that they would repossess your property which would cost them and they still would not get the loan repaid.

You will suffer a bad credit rating but you would be able to carry on living in your house / home.

Rabiddog_2

Mike, it sounds to me like you are trying to wriggle out of any blame for taking out a loan and spending the money, without having the means to pay it back. What part of the loan and paying it back did you not understand? did you not see all the warnings about "could cause you to lose your home ".
I prefer it myself when people come on here and be a bit more honest, and sometimes, painful as it is, that means admitting being either greedy or stupid, but also taking responsibility for the consequences of their actions. You are free to ignore my advice (and comments). I suspect I know as much about debt as you.

prudentsaving42

Rabiddog wrote: »

Mike, it sounds to me like you are trying to wriggle out of any blame for taking out a loan and spending the money, without having the means to pay it back. What part of the loan and paying it back did you not understand? did you not see all the warnings about "could cause you to lose your home ".
I prefer it myself when people come on here and be a bit more honest, and sometimes, painful as it is, that means admitting being either greedy or stupid, but also taking responsibility for the consequences of their actions. You are free to ignore my advice (and comments). I suspect I know as much about debt as you.

I couldn't agree more.:o