Sell Your Home Quickly - What's the catch?

Married_Mum_of_2

Hi - we need to sell our house ASAP.

We can no longer afford to pay the mortgage. But, the market is terrible right now and unfortunately we are going to have sell at a time when we will get the lowest price for our house and at the same time we are at the highest mortgage exit fee penalty -£21,600 - meaning we would be in negative equity and would actually owe money.

I've got 2 questions -

1. Does anybody know if there's a big catch to these 'sell your house fast to cash buyers' companies that I've found on the web?

2. Do you think there's anyway out of our mortgage exit penalty with Northern Rock if they know how severe our financial problems are?

Thanks

m00m00

1) the big catch is they will offer you a much lower price than you would get selling through conventional means.

2) you have absolutely nothing to lose by talking to Northern Rock and seeing if there's any way your situation can be helped. They may say no, but you will be no worse off than you are now.

If you are in the position of having to sell, I would sell it through a conventional estate agent, but price aggressively to sell. You would still make more money this way than through the sharks that advertise to 'buy your home quickly'.

poppysarah

They will offer you about 50% of the value of your home.

Not worth doing.

Can you not earn more money? Has one of you lost your job?

Married_Mum_of_2

DH has his own business which is going through a rough patch.

I'm a stay at home mum to a 2 year old and due to give birth next week to baby 2 so cannot really earn anything at the moment.

amcluesent

>They will offer you about 50% of the value of your home.<

Yep, vultures. I know some BTL LLs who are now pooling their funds to start these type of organisations to buy from distressed owners for a pittance.

> I'm a stay at home mum...<

I'd speak to CAB/Shelter etc. The worst thing is to make yourselves homeless, then the council won't help; it could be better to wait until you're repod, which will take some 6 months.

southernscouser

Is there any way you can cut back on other expenses?

You could try posting on the DFW board. Even if you don't have debts they can strip your outgoings to the bare minimum to free up some money.

If you do have any other debts, ie loans, cards, catalogues then get in touch with the CCCS who are a registered charity. They can offer you free financial advice.

Treadmill

I did hear that NR where waiving exit fees for people wishing to remortgage with another lender as a measure to reduce their mortgage book.

clutton_2

if you sell your property for less than the amount you owe your Lender, you will still owe the difference.

the lender is legally allowed to chase this debt for 6 years. You need to do some fierce negotiation to get them to stop "rolling up" the interest - as this means the debt will increase monthly AFTER you have sold the house, and you attempts to pay off the loan will never be successful.

devils_advocate

OP, I hope that you're sitting down when you read this, but you and your husband are going to need some very serious professional advice very soon. I would suggest seeing a licensed insolvency practitioner as your first stop.

There are two areas of concern:

You don't state if the business is a sole trader, partnership or limited company. You do say taht you're borrowing £3k a month from the business, but you don't say the source of the cash. If its from the working capital of the business, the lender will be most displeased to see the business killed off because you've starved it of cash, and will probably go after you and your husband for the personal guarantees which you have no doubt given. This will leave you absolutely stuffed, but there are so many possible permuations, depending on your circumstances, that I reaslly can't comment further.

The second is the tax credit. Have you declared the rental income and the loan from the business, on these forms? You may find that they're deemed as income, and therefore HMRC will want repayment of the tax credit.

The third is the loan from the business. HMRC could deem it as income, and look for PAYE and NI on it. The company could also face penalties for not deducting the tax and NI.

Your mortgage is very high in relation to your income. Think very carefully as to what you put on the mortgage application form. The leder may take a dim view if what you said didn't represent the whole truth.

And finally, if you and the business do go under, because of the way you have structured things, there is a possibility that some of your actions could constitute fraud. These things are always judged in hindsight, but the longer you leave this situation, the less chance you have of claiming an innocent mistake.

As I say, see an insolvency practitioner now. Even if the Xmas rush is going to be the saviour of your husban's business, its a long time till Xmas and I doubt, financiallly, you'll last that long. And dont assume that Xmas 2008 sales are goingto be as good as 2007.

(and if anyone finds this reply strange, it a composite of replies to all the points on the OPs other 2 threads on the same topic)

silvercar

Married_Mum_of_2 wrote: »

Hi - we need to sell our house ASAP.

We can no longer afford to pay the mortgage. But, the market is terrible right now and unfortunately we are going to have sell at a time when we will get the lowest price for our house and at the same time we are at the highest mortgage exit fee penalty -£21,600 - meaning we would be in negative equity and would actually owe money.

I've got 2 questions -

1. Does anybody know if there's a big catch to these 'sell your house fast to cash buyers' companies that I've found on the web?

2. Do you think there's anyway out of our mortgage exit penalty with Northern Rock if they know how severe our financial problems are?

Thanks

These companies will offer you 80% of the current market value -MAX.

As this won't be enough to clear your mortgage and ERC, your lender won't allow the sale to proceed (unless you can come up with the difference) so the idea is a non-starter.