I live in the UK and have a Mortgage with Northern Rock. I am around 5 months in arrears and the house is becoming a huge burden. I need to get rid of this house quickly but nobody is buying for the amount I owe on the mortgage (which is less than the house is worth).
Can I surrender the house to the lender? I do not want this to go to court as we have a baby on the way and need every penny.
You are probably neglecting your mortgage because of paying other debts, it is they that are the burden. Credit card and personal loan debt taken out before 1 April 2007 may not be legally enforceable, so get that checked asap. It may save you some monthly outgoings. Part of your Northern Rock mortgage may also be affected. Don’t do anything hasty until you’ve visited the website and got help.
No answers, but sounds like big trouble. I know you’d be able to do it here in the US. Well, they’d TAKE it from you, and your credit would be ruined for years….
Good luck to you!
References :
My step-son was in a similar position to you with the Abbey. He has been able to hand back the house to them and only has to pay the arrears. I think if they finally sell it for more than he owes, he may get some money back. If they sell it for less then he will have to pay that as well. But as least he be faced with repossession or bad debt.
I hope that helps. It must be very worrying.
References :
The house is only worth what someone is willing to pay for it. If you hand it back you will still owe them and when they eventually sell it, if they can, you might still owe them. Of course they might sell it for more than you owe so you might get something back but highly unlikely. If you can afford to do it hang on, ride out the troubles and in 4 or 5 years time it will probably sell at a profit to you
References :
Go to the bank and have a discussion with them to find a way out of the your problems. You still need a place to stay with a baby on the way. The government is bailing out banks and find ways to help them to do their business normally. In return the bank should help you out of your problems. In am sure something good can be worked out for you.
References :
You can hand your keys back in to the lender but what then happens is that the lender puts it on the market to recoup the maximum amount of money it can. The fact that it is a repossession quickly becomes known in a certain part of society and offers of less than its worth are made and accepted. The lender gets a chunk of money back and the speculator has a property that he will in the short to medium term make a profit on, so, those two are happy. Unfortunately you would not be so happy as you would still owe the interest arrears AND the amount that the house made that was under the outstanding amount, so even with the best of intentions, you could still end up in court!
By far your best course of action is to go in and TALK to the lenders and arrange a re-finance package. This will keep you going till the upturn in the market and you can then sell at a profit if you wish.
References :
There is a saying…’It is always darkest before the dawn’. The Bank Rate has dropped 1.5%. Contact Northern Rock and check if you benefit. Contact them anyway to ask them to help you out. This type of problem is precisely what the lenders have been criticised for. They (Northern Rock) have been bailed out by the Govt. and told to make amends. The last thing you should do is to walk away from this. There is always a solution. Stress tends to mask such solutions.
House purchase is a long term commitment. Negative equity happens, but it is cyclical. That is, the market will recover. The main thing is you have a roof over your head. If you persevere and don’t give in you will succeed. Jack it in and you are at the mercy of a landlord who can charge you what he likes at the end of the day. So you could be even worse off. Talk to Northern Rock. It won’t cost you anything, and you may well be able to get by. You will look back on this difficult time and think "Thank God I didn’t throw it all away". Trust me.
References :
You can, but it may not be the best option for you. If you give the keys back the bank will go through the process of repossessing your home. All the costs that they incurr (lawyers fees, court fees, estae agents fees etc.) will be for your account along with mortgage arrears and interest on the arrears and they will pursue you for this debt.
Given what has happened to interest rates, would re-mortgaging be a possibility? or have you considered trying to find someone to rent it?
References :
You are probably neglecting your mortgage because of paying other debts, it is they that are the burden. Credit card and personal loan debt taken out before 1 April 2007 may not be legally enforceable, so get that checked asap. It may save you some monthly outgoings. Part of your Northern Rock mortgage may also be affected. Don’t do anything hasty until you’ve visited the website and got help.
References :
http://www.bdebtfree.info