Negative equity

[stefancrockski]

Good evening everybody,

I have spent a frustratingly lengthy amount of time on this forum looking for help but can't seem to find a similar situation. Although I'm sure this has been asked before so apologies in advance

 

Basically we are struggling to make ends meet and currently pay £1100 a month on our £185,000 mortgage with Northern Rock. We also pay £350 a month to GE money for a £35,000 secured loan.

 

On top of this we have a debt management plan with Payplan totalling approx £11000. This is being paid at £100 a month as this is all we can currently afford

 

I am working and my wife is currently a seconded student receiving a monthly wage. We are considering selling our property and downsizing (renting) to try to pay off debts as soon as possible

 

Our concern is that we are in negative equity and the sale of the house will not cover both the mortgage and the secured loan.

 

As I understand it both GE Money and Northern Rock would have to authorise the sale of the house. Do we need the institution's permission to put the house up for sale or once we hopefully have a buyer?

 

In respect of the secured loan will the remainder be turned into an unsecured loan and what are the normal practices with this?

 

Thanks in advance if anybody can help

[Guest Old_andrew2018]

Sorry my reply is only to BUMP your thread, with luck someone with expertise will reply.

 

Andy

[jansus]

You are correct in that you need permission of the lenders - the first charge lender will probably give permission as they will get their funds - with regards to the second charge all you can do is ask them for their reaction.

 

It is much better to take this course of action rather than hand the keys over and as long as you continue to pay what you can afford then you should be allowed to remain in the property while it is on the market.

 

I dont think you can get a definitive answer to your question as each lender will have a different way of dealing with this situation.

 

Keep posting and let us know how you get on.

[PriorityOne]

 

On top of this we have a debt management plan with Payplan totalling approx £11000. This is being paid at £100 a month as this is all we can currently afford. Can you remember what these debts are for (ie, credit cards/loan) and who these payments are going to (via Payplan)?

 

I am working and my wife is currently a seconded student receiving a monthly wage. We are considering selling our property and downsizing (renting) to try to pay off debts as soon as possible If the £100 per month was reduced, would you be able to continue as you are with your other existing outgoings?

 

In respect of the secured loan will the remainder be turned into an unsecured loan and what are the normal practices with this? Yes it will and they will expect you to repay it. If you have no remaining assets however, then this may not be as bad as it sounds..... since they can't take what you no longer have.

 

Thanks in advance if anybody can help