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Urgent help! Negative equity

(21 Posts)
bakerypots Mon 28-Sep-20 12:35:23

If we sell our house below what we owe on the mortgage but can pay it on a credit card (it's only 3k) is that allowed?

OP’s posts: |
Basicallytired Mon 28-Sep-20 12:47:49

That should be okay but why are you in this situation? Are you willing to share?

bakerypots Mon 28-Sep-20 12:49:39

Basically our house is very low value, and we are desperate to leave. Sent it to auction and this is what we've achieved...

OP’s posts: |
BonnieTellyLass Mon 28-Sep-20 12:50:57

Do you absolutely need to sell? For "only" 3k can you not hold out for a sale closer to that amount?

Ultimately it will depend on your provider if they approve it as some may have different regulations but i would think as long as they get their money they wouldnt mind?

BonnieTellyLass Mon 28-Sep-20 12:51:19

ah sorry cross post

bakerypots Mon 28-Sep-20 12:52:38

It's been up for a long time now and this is the closest we've got to what we need (other than something which fell through before it went to auction)

OP’s posts: |
Sarahlou63 Mon 28-Sep-20 12:54:18

Worth trying to negotiate with the lender to write off the £3k first. Don't offer up front.

Tigger03 Mon 28-Sep-20 12:54:42

Where are you moving to? Do you have a deposit for the new place covered?

titchy Mon 28-Sep-20 12:56:02

If you've already got a bid at auction aren't you now legally committed to proceed with it?

bakerypots Mon 28-Sep-20 12:57:49

Sorry - no it went to auction after the initial sale fell through as the buyer couldn't get the required funds together.

We will of course ask agent to try and negotiate higher but they've been pretty awful to deal with and useless in the whole process so far!

OP’s posts: |
bakerypots Mon 28-Sep-20 12:58:56

And no - we have a reserve in place so if it doesn't meet that we aren't bound.

We are moving in with family as a temp fix and will happily rent instead of staying in the house

OP’s posts: |
Ltc2020 Mon 28-Sep-20 16:31:41

I think this can effect your credit score but I’m not sure? OP why do you need to leave so imminently?

Tappering Mon 28-Sep-20 16:35:42

It would only affect her credit score if she was to make a late payment or default.

OP you can ring your mortgage firm, explain what's happening to them and arrange to pay the £3k over the phone with them. I would do this on the day that you complete the sale so that you aren't incurring interest before you need to. Then make sure that you are paying a reasonable payment towards the card each month (not the minimim payment!)

NoSquirrels Mon 28-Sep-20 16:36:25

We will of course ask agent to try and negotiate higher but they've been pretty awful to deal with and useless in the whole process so far!

At auction you get what you get. So I do t think that’s a viable plan.

But you can speak to your mortgage lender and see whether there is any consideration they can make for you.

If you need to go down the credit card route perhaps a money transfer card would be best? Look at this article:

ChaChaCha2012 Mon 28-Sep-20 16:39:15

Have you taken into account the legal fees of selling, both for the auction and conveyancing? Also check if there is an early repayment fee on the mortgage.

AuntieDolly Mon 28-Sep-20 16:41:34

Can you auction a mortgaged property?

Mehmehmeh19 Mon 28-Sep-20 16:47:35

I don't think they'll let you pay over phone with a credit card, but if you get bank details and transfer it they'll not know.

Also as mentioned above what about fees? Have you factored those in.

Be worth speaking to your lender to see if they can arrange a shortfall at sale plan for you? To pay it back over x period?

bakerypots Mon 28-Sep-20 19:12:37

So - we met our reserve so have enough to cover the mortgage costs! Woooohooo.

We have the cash to pay our agent/solicitor (our sales proceeds won't cover it)

OP’s posts: |
mountains76 Mon 28-Sep-20 19:34:10

Congrats. Sounds like you where quite keen to get out of there. How long ago did you buy it to be in negative equity?

Tappering Mon 28-Sep-20 19:46:00


Can you auction a mortgaged property?

Yes but you have to tell your lender and get their agreement. And if there is a shortfall then you are still liable for that debt.

RandomMess Mon 28-Sep-20 20:00:43

Really happy for you thanks

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