Struggling with the mortgage and in negative equity. Can I sell?
Q: I'm in negative equity, want to sell and have found a buyer. Can my mortgage provider block the sale of the property if I do not readily have the funds to make up the shortfall?
In order for the sale to go through the mortgage will need to be discharged and repaid in full. All mortgage lenders have a charge over the property, which acts as security for the loan. In order for the lender to release that charge the mortgage will need to be fully repaid.
If that is not fully covered by the proceeds of sale then the shortfall will need to be paid from other means. That could be from other savings or if that’s not possible it could be covered from another source such as unsecured lending.
Even in the unfortunate situation when a property is repossessed and the sale proceeds don’t cover the outstanding mortgage amount the liability for the shortfall remains that of the borrower.
David Hollingworth, London & Country Mortgages