Mortgage shortfall

[Everythinghappensforareason1]

Just wondering if anyone can tell me what happens in this situation. House is on market at 155,000 owe 149,000 to NRAM. If I accept an offer of say 145,000 what happens to shortfall? Do NRAM arrange a loan to pay it back. I have no savings. Mortgage is 960 per month, so it is worth me accepting lower offer as only 4 months mortgage payment and I desperately need to sell.

Anybody been through this before?

TIA.

And what happens to your credit rating? What would it show up as on your credit score if you had mortgage shortfall

You will still owe the £4,000 (plus there will be fees involved you'll need to pay).

You might be able to get a loan from somewhere, but you would have to arrange that - if you have a good credit record, you can get loans for 4% at the moment; but if you have any late mortgage payments, you would be looking at a lot higher interest rate than that, so maybe you need to look around first to understand the cost of that...

If you pay off the debt, then your history will show that you successfully paid off the debt - i.e. you are a good bet for future lending...

If you don't pay it off, then it will make borrowing difficult for you, for the next few years at least.

Your solicitor will get the details of your mortgage - including the "redemption amount" - as you go through the process of selling the house, and will ask to see proof of how you'll repay that entire loan. You won't be able to sell before you've got the full amount of money to repay the mortgage.

Proof could be a current bank statement showing the 4,000, or paperwork for an accepted loan amount.

You can tell any prospective buyers that you need a minimum of 152,000 to cover your costs. (Are you selling through an estate agent? Don't firget they charge a percentage of the selling price, plus VAT. And there'll be solicitors costs. Add up that entire amount so you know the figure you'll need. You can't just ignore it - your mortgage company will have put a charge against the house for the full mortgage amount, and it'll be unsellable unless you have the means to repay the full amount.

I have a client who is still paying off the negative equity on a house that was repossessed in the 1990's : he pays £50 a month.

You will not be able to sell the house without paying off the mortgage in full This is the only way to give the purchaser a clear title

Thanks everyone for all your useful information. I have PPI coming through anyday now that i am setting aside and will cover EA fees and solicitor. Was hoping NRAM would do a payment arrangement to pay them back any shortfall I might have. Think I best start looking at loans. Thanks again for info.