Second Mortgage

If you lose your home through repossession, you are still liable for any mortgage interest, estate agent fees and legal fees until the lender has sold your property.

Upon selling your home, the money from the sale will help to clear the lenders mortgage account, once this has been taken care of if there are any funds left over they are repaid to you.

It is important to remember though that any shortfall will still be your responsibility and remains so for up to 12 years. It is therefore in your best interest to make sure the property is not only sold for the best price possible but also quickly.

On saying this lenders do have a code which is provided by the council of mortgage lenders which they must stick to when it comes to claiming any shortfall back from you. A letter must be served to you by recorded delivery within a period of 28 days of re-sale of the property. Various details pertaining to the sale must be included within the letter such as

• A full description and the address of the property

• The price for which the property was sold

• The vendors name and address

• The purchasers name and address

• Whether the house was sold through auction or private treaty

• The date the sale was finalised

• The date of the mortgage deed which power of sale was exercised

The lender is required by law to sell the property for as high a price as is possible, but due to the fact that they will want to reclaim the arrears as soon as possible, there is a risk they will sell far below price.

Before you give your home up to repossession, it is in your best interests that you get two independent valuations or at the very least ask estate agents for sales particulars which include the asking price.

Your should do nothing which could be considered detrimental in altering the asking price of the property, treat it as though you were selling it yourself.

Keep up with what is going on with the property by checking out the estate agents website to make sure the property is listed and also that a for sale has been erected.

Make sure they are listing the property to its best advantage by including wording such as “immediate occupation available” and “no chain”. Should the property price be way below its value then make sure you bring this to attention in writing, however go about this sensibly due to the fact that if the market is slow and you ask too much, it could take longer to sell.