Introduction
Are you struggling to keep up with your mortgage payments? Selling your home might be a way to manage your debts and regain financial stability. In this guide, we’ll explore the essential factors you need to consider before making this significant decision, from understanding your responsibilities to exploring alternatives. If you need assistance navigating this complex process, Contend’s highly trained AI legal experts are here to help. With Contend, you can easily access the legal support you need to understand your options and resolve your legal issues.
If you’re facing difficulties in keeping up with your mortgage payments, selling your home could be a viable option to help clear your debts. This move can provide you with a lump sum of money that you can use to pay off your mortgage. However, there are several important factors to consider before making this decision.
Responsibilities Until the Sale
Even if you decide to sell your property, you are still responsible for making mortgage payments, maintaining insurance on the property, and covering other associated costs until the sale is finalized. It’s essential to stay on top of these obligations during the selling process.
Consider Your Future Housing
Before selling, think about where you will live after the sale. If staying with friends or family isn’t an option, finding new housing can take time. You may need to reach out to your local council for assistance in finding a place to live.
Explore Alternatives to Selling
Before deciding to sell your home, consider if there are other ways to manage your mortgage debts. You might be able to:
- Adjust the terms of your mortgage for lower payments.
- Take out a loan against the equity in your home.
Consult with your lender to explore these options.
Selling vs. Handing Back the Keys
If you’re unable to keep up with payments, it might be tempting to simply return the keys to your lender. However, it’s generally better to sell the property yourself. When lenders sell a home, they often receive less money than if you sold it through an estate agent. This could leave you with a mortgage shortfall, meaning you would still owe money even after the sale.
If you find yourself in a situation where you need to apply for housing assistance, do so before leaving your property to avoid complications.
Understanding the Sale Process
Before putting your home on the market, get an estimate of its value from an estate agent, which is usually free. Make sure that the expected sale price will cover your mortgage and any other debts. If you suspect that the sale won’t cover your debts, you’ll need to get permission from your lender to sell. Check your lender’s website for contact details and inquire about their requirements for selling.
If Your Lender Denies Your Request
If your lender refuses to let you sell, you can file a complaint with the Financial Ombudsman Service. They can intervene if they find that the lender acted unfairly. You can also seek a court order to sell your property, but this process can be complicated and costly, so it’s wise to consult with a solicitor first.
Costs of Selling Your Home
Selling a home comes with various costs, including fees for estate agents and solicitors. While these costs are typically deducted from the sale proceeds, some solicitors may require upfront payment. It’s important to discuss fees with multiple solicitors to understand their charges and payment timelines.
Impact on Benefits
If you have any benefits, receiving a lump sum from the sale could affect your eligibility. For instance, you may no longer qualify for income-related benefits like Universal Credit or Housing Benefit if your savings exceed certain limits. Consult with an adviser to understand how selling your home might impact your financial situation.
Handling a Mortgage Shortfall
If the sale of your home doesn’t cover your mortgage debt, you will be responsible for the remaining amount, known as a shortfall. Your lender will send you a bill for this amount, and if you can’t pay, they may take legal action. It’s crucial to seek advice if you anticipate a shortfall after selling.
Managing Other Debts
If you have multiple debts, prioritize which ones to address first. Options for managing debt include:
- Setting up a debt management plan.
- Applying for a Debt Relief Order (DRO).
- Filing for bankruptcy.
If you choose bankruptcy, you can include your mortgage shortfall in your filing.
Finding New Housing
Once your home is sold, consider your housing options carefully. Renting can be challenging, especially if landlords conduct credit checks. Explore temporary housing options with friends or family if possible.
If You Face Homelessness
If you don’t have a place to go after selling your home, contact your local council about housing assistance. It’s best to reach out before you sell, as they will assess your situation to determine if you are “intentionally homeless.” If they classify you as such, you can request a review of their decision.
Additional Support for Vulnerable Individuals
If you have children or a disability, you may qualify for additional housing support from social services. Contact your local council’s social services department for more information.
For more resources and information, visit GOV.UK to find your local council.
Navigating the sale of your home and managing mortgage debt can be overwhelming, but you don’t have to do it alone. Reach out to Contend’s legal expert chat for professional advice and support to help you make informed decisions. Contend’s highly trained AI legal experts will work with you to provide guidance and help you understand and resolve your legal problems. Contend is the Easiest Legal Help in the UK.
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