Paying off mortgage debts monthly can be frustrating especially if you are struggling financially. In fact, you may even fall into debt. If you are at a point where you do not have any other means of paying off your mortgage debt, you may want to consider selling your house.
This is usually an easy way of obtaining money that you can then use to pay off your mortgage. You may even have some money left over to clear other debts. Here are some important considerations that you must keep in mind when you want to sell your house fast to clear your mortgage debt.
To begin with, if you are repaying a mortgage and you are in debt, avoid handing your keys back to your lender or sitting there and waiting to be evicted. This is the biggest temptation when you have fallen back on your mortgage payments. Some homeowners opt to vacate the property and hand the keys to the mortgage lender while others do nothing and just wait for eviction from the property.
If you sure do not have other means of paying for your mortgage, you will do well to sell the property on your own instead of handing it back to your lender without doing anything to save the situation.
The downside of this is that you will still be required to make mortgage payments, pay for the buildings insurance as well as other costs until you find a buyer. Moreover, your mortgage is likely to sell the house for much less than you would as is usually the case with those properties where owners have handed the keys back to the lender or they have been evicted.
In such a situation, you are unlikely to get adequate money to cover the money you owe your lender. Consequently, you will still have a debt to pay. In this case, you need to inform of your lender of your intention to sell so that you make arrangements to pay for the difference. If you cannot arrange to repay failure, to which your lender may go to court to force you to pay.
In an ideal situation, your lender usually has a time limit within which to take action to recover the difference from the sale of the house. This can be a little complicated hence you need to get advice.
Should you fail to pay this difference and go ahead to purchase another property, the lender of your first property could take you to court that may then a charging order against your new property. Therefore, you will be forced to sell your new property and the proceeds be directed to repay the difference. The lender may also obtain orders to sell our new home to repay your debt. If there are other debts besides the difference from the sale of your house, you could file for bankruptcy where you can include the difference in the bankruptcy order.
In summary, selling your house to clear your mortgage is an idea that you need to apply after carefully examining your situation and possible options. This way, you can then sell because it is the best option that will produce the best solution.
Katie is a finance specialist with one of the biggest firms in London. From savings to investments, there’s nothing she can’t advise on and she’s here to help spread the word and help you on your way to financial freedom.