Giving up my home/mortgage - How do I go about it?

Maxtout

I also posted this in the Mortgage section so please forgive the double post. Has anyone taken the action that I am asking about?

Some background.

My Together mortgage is with Northern Rock and my fixed rate deal came to an end June 1st. Leading up to this I spent several weeks trying to move the mortgage to a new fixed rate deal but no equity in property that was slowly losing value I was unable to obtain a 95% of value mortgage. My total mortgage is £157,000 and the property has been valued recently at £150,000.

The end of the fixed rate deal has meant the mortgage payment increasing by £180 a month.

I am prepared to give up my home in order to get my financial affairs in order as this would free up £1200 a month so my question is how do I go about it without defaulting and ultimately repossession?

Sell it? Would still leave some mortgage debt plus some of the property would need redecorating to help maximise sale value.

Can I simply give NR the keys? Is there a process for giving up on a property/mortgage in this fashion?

Renting is an option but only as a last resort. If I give up my home I do not want to have the responsibility of keeping it for somebody else. Also the rent would only be around £700 a month so I would still be paying an additional £500 which is cash I can use elsewhere. I want to be debt free within five years.

In other words I want out of this mortgage. I am not all that bothered now about giving up my home.

Thanks in advance for any advice.

LilacPixie

To be honest I don't know if there is a way without damaging your credit history.

I think if you just hand the keys back to NR they will default you on the mortgage as you won't be keeping up payments then sell the house for whatever they can get and chase you for the remaining amount.

You could try sell the house at an amount to cover the o/s mortgage plus selling fees but the chances of doing that are slim to none at the moment.

Repossesion will damage your credit rating and NR will just chase you for the shortfall which realistically could be 20k+

Repossesion may effect your ability to rent and many LA's do credit checks.

I think you may have to stay put for a bit and try ride the storm out.

pania

selll the house yourself but you'd need to cover the negative equity. if you hand the keys back NR would mark it as a repossession (it's known as voluntary repossession) and would sell the house for a song. they'd then chase you for the outstanding debt which could well hammer the debt free target that you have set for yourself.
this really would be the best and only way of doing it without marring your credit report. rental as you say wouldn't be an option due to the shortfall between mortgage and rental income and you'd need to obtain consentt o lease from NR also.
Good luck for the future, stick with us on here and we'll all try to help out where we can.