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Charging Order against property with negative equity - HELP!
2 Answers
My partner and I bought our house in 2006 with a part-mortgage-part-loan agreement with Northern Rock. We bought our house for �90k, �85k with a secured mortgage(max we were allowed to have) and then had �25k as an unsecured loan with Northern Rock to cover the rest of the purchase price, solicitors fees and consolidation of 2 c/cards and a loan.
Everything was fine until a financial advisor advised us last year that we could get a better deal. So stupidly we moved our mortgage to Birmingham Midshires, leaving the unsecured loan with Northern Rock as Birmingham Midshires were not prepared to give us enough money to cover it. We were fine with this as our payments would still have been cheaper - until we received a letter from Northern Rock stating that because we had moved our mortgage the APR on the loan would increase by 5%!!!
We couldn't keep up with the payments to Northern Rock so they put a charging order on our property!
We would now like to sell and start renting because we are struggling with money so much but can we sell if there is a charging order on it??? We have an agreement with Northern Rock to pay x amount each month so could the charging order be lifted as long as we keep up the payments for the next 25 years?!
Our house is only worth �90k so if we sell this would barely cover the mortgage with Birmingham Midshires.
I don't know what to do, this is all such a mess!
Everything was fine until a financial advisor advised us last year that we could get a better deal. So stupidly we moved our mortgage to Birmingham Midshires, leaving the unsecured loan with Northern Rock as Birmingham Midshires were not prepared to give us enough money to cover it. We were fine with this as our payments would still have been cheaper - until we received a letter from Northern Rock stating that because we had moved our mortgage the APR on the loan would increase by 5%!!!
We couldn't keep up with the payments to Northern Rock so they put a charging order on our property!
We would now like to sell and start renting because we are struggling with money so much but can we sell if there is a charging order on it??? We have an agreement with Northern Rock to pay x amount each month so could the charging order be lifted as long as we keep up the payments for the next 25 years?!
Our house is only worth �90k so if we sell this would barely cover the mortgage with Birmingham Midshires.
I don't know what to do, this is all such a mess!
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1. You need to look at the possibility of a complaint against the financial adviser who got you to change the mortgage. If he knew about the unsecured loan & that it was granted by N Rock when you took the mortgage from them, then it may be that he should have looked into its terms & advised you that the interest rate would increase. In other words, his advice may have been faulty. If this was determined then you could possibly get some compensation. The adviser has to have a complaints procedure you can go through, & you can then complain to the FSA if necessary. Look at the FSA website or phone their helpline.
2. The charging order will only be lifted if you pay off the total amount due (including any interest that may be added on).
3. If you want to move out & rent, you can ask N Rock whether they would agree to a sale even though their charge would not get paid off. If they do agree, make sure they put it in writing. You might also need to ask Birmingham Midshires the same thing unless you are certain the sale price would fully clear your mortgage with them.
4. If you can't get agreement to sell then you could just stop paying the loan & the mortgage. Save up the money to pay the deposit & several months rent in advance & let the house be repossessed. It will then be sold at a price which will almost certainly leave you with unsecured debts to both Birmingham & N Rock. You would have to negotiate repayment plans for these based on your income & expenditure & what you could afford.
5. If you can't keep your payments up, your credit record will be adversely affected by all this & that could make it difficult for you to rent (as you would fail a credit check) unless you have a guarantor.
6. Go to your local CAB or contact CCCS or another free debt advice service to discuss all this in detail.
2. The charging order will only be lifted if you pay off the total amount due (including any interest that may be added on).
3. If you want to move out & rent, you can ask N Rock whether they would agree to a sale even though their charge would not get paid off. If they do agree, make sure they put it in writing. You might also need to ask Birmingham Midshires the same thing unless you are certain the sale price would fully clear your mortgage with them.
4. If you can't get agreement to sell then you could just stop paying the loan & the mortgage. Save up the money to pay the deposit & several months rent in advance & let the house be repossessed. It will then be sold at a price which will almost certainly leave you with unsecured debts to both Birmingham & N Rock. You would have to negotiate repayment plans for these based on your income & expenditure & what you could afford.
5. If you can't keep your payments up, your credit record will be adversely affected by all this & that could make it difficult for you to rent (as you would fail a credit check) unless you have a guarantor.
6. Go to your local CAB or contact CCCS or another free debt advice service to discuss all this in detail.
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