Selling house with a secured loan

[LippyKid]

Hi All

I'm currently in process of selling my house before I did I checked with the loan company that the secured loan we have on it was transferable which they confirmed it was so far so good! I have now found out that it is not transferable as the there will not be any mortgage at least initially where I am moving to so I have to pay the balance which is 28k or they can block the sale.
Is this this true can they do this? and if so is there anyway I can circumvent this as I don't have 28k to hand over just like that, obviously best case is that I can carry on paying the instalments as I have been since I've had it.
But is this possible?

For clarity there are no CCJ's and no arrears with the loan.

Sorry if I have posted in the wrong section.

[PlanB]

Re: Selling house with a secured loan

Did the company with the secured loan put in writing that it was portable in the event of a sale?

What reasons are they giving you now for changing their mind?

What does it say in the loan's Ts & Cs about portability? If it's in the Ts & Cs that you can, then they can't refuse in principle.

If it's in the Ts & Cs that they can re-underwrite you to see if you comply with their current lending criteria which may be tighter than the original criteria (I'm afraid this is often the case) then they can fail you at the underwriting stage, but they'd have to have a very good reason such as missed payments.

Let me have a bit more information. Who is the lender for starters?

[LippyKid]

Re: Selling house with a secured loan

Thanks PlanB much appreciated for your response so quickly, ok its First Plus when I finish writing this I shall digging out the T & C's and go through it, unfortunately they have been a couple of missed payments over the years nothing too serious and now there are no arrears and haven't been for at least 18 mths but I can see your point that they will use that as a stick to reject any re-underwrite.

[PlanB]

Re: Selling house with a secured loan

they have been a couple of missed payments over the years nothing too serious and now there are no arrears and haven't been for at least 18 mths.

It may be ok if you've got enough provable income to support the repayments since £28k is not a big loan. When did you first take out the loan, and how many more months are there left to run?

Is there a first mortgage in place on your current home which will mean that 1st Plus only have a second charge? You say when you move there will not be a mortgage on the new property which means if you port this secured loan they will have a first charge on the next place which improves their position.

However, bear that in mind because if you want to take out a mortgage at a later date this may be difficult since the new mortgage will be a second charge (after 1st Plus). Charges are always registered in chronological order regardless of the amount.

[LippyKid]

Re: Selling house with a secured loan

Thanks again PlanB

Loan was taken out August 2007 over 300 months so there is 18 years left

There is a mortgage on our current home, re the new home this is what I thought regarding their position that's why I find it puzzling that they are being so difficult over it?

I understand your point re mortgage at a later date, we'll need to cross that bridge etc then.

I've combed through the T & C 's from the original agreement and I cannot see anywhere where it states it can be ported however by the same token it doesn't say we can't so is there an argument that can favour us in this situ?

[PlanB]

Re: Selling house with a secured loan

There is a mortgage on our current home

there will not be any mortgage at least initially where I am moving to

I've had a thought

If the mortgage on your current home is portable why not port that loan on to your new purchase and use the money to pay off the second charge. First mortgages are usually at a much better interest rate than secured loans so your monthly repayments could reduce.

You'd still owe £28k but it would leave you open to apply for a further advance or increase that mortgage in future. You won't be able to do that with the secured loan.

I don't know the size of your current mortgage but if you only need £28k then maybe you'd be asking your lender to downsize the loan to port only a smaller amount which would be easier to negotiate. Tell them you're simply offering them alternative security which improves their position.

[LippyKid]

Re: Selling house with a secured loan

Hi PlanB

Sorry for delay in response, what you said would be ideal however the mortgage co don't port so we'd have make a new application and as I'm self employed we've been told it would get declined.

Thank-you for responding though

[PlanB]

Re: Selling house with a secured loan

what you said would be ideal however the mortgage co don't port

Who is the lender on your first mortgage and where does it say they don't port ?

the secured loan we have on it was transferable which they confirmed it was so far so good! I have now found out that it is not transferable.

Your secured loan (2nd mortgage) is with First Plus and despite what they told you they do port mortgages, according to their website (5 minutes ago). All you have to do is download the Moving House Transfer Charge Request Form on their website. Of course it will say "Terms & Conditions apply" but they've still got to be reasonable or it's off to the FOS with them!


http://www.firstplus.co.uk/Account-changes/Moving-house


This is what it says on their website so you can hold them to this:


Moving house

Here's what to do if you're moving house during the period of your loan.
If you move house, you may be able to take your loan with you.

However, because your Firstplus loan is secured on your current property, you will need to tell us if you're planning to move.

Please complete a Moving House/Transfer Charge Request Form, and return this to us at least 21 days before your moving date.

You should also be aware that if you move to a lower value property, you may need to settle some (or all) of your loan early using the funds from the sale of your property.

Please remember, any change to your Firstplus Loan Agreement need our approval. Our normal terms and conditions apply.

[TibetanMonk]

Re: Selling house with a secured loan

Who is the lender on your first mortgage and where does it say they don't port ?





Your secured loan (2nd mortgage) is with First Plus and despite what they told you they do port mortgages, according to their website (5 minutes ago). All you have to do is download the Moving House Transfer Charge Request Form on their website. Of course it will say "Terms & Conditions apply" but they've still got to be reasonable or it's off to the FOS with them!


http://www.firstplus.co.uk/Account-changes/Moving-house


This is what it says on their website so you can hold them to this:


Moving house

Here's what to do if you're moving house during the period of your loan.
If you move house, you may be able to take your loan with you.

However, because your Firstplus loan is secured on your current property, you will need to tell us if you're planning to move.

Please complete a Moving House/Transfer Charge Request Form, and return this to us at least 21 days before your moving date.

You should also be aware that if you move to a lower value property, you may need to settle some (or all) of your loan early using the funds from the sale of your property.

Please remember, any change to your Firstplus Loan Agreement need our approval. Our normal terms and conditions apply.

Hook, line, sinker.

[LippyKid]

Re: Selling house with a secured loan

Wow thanks Plan B, I'll be thinking again on this now the 21 days thing maybe a bit tricky as we are almost good to go however gonna pursue this more rigorously now.

Thanks again

[PlanB]

Re: Selling house with a secured loan

I would write to them asap and tell them that you may not be able to meet the the 21 Day Rule because you've only just discovered the 21 Day Rule on their website.

I would make it a formal complaint that they didn't make you aware of this option to port and complain strongly that they lied to you (if they did) when they said you couldn't port your mortgage in principle. Did you ask in writing and was your response/refusal in writing?

Never give up with lenders when they quote "policy" at you. Keep fighting until they give in to your demands!




Read Scrappy's thread for inspiration. He was in a similar position to you with another lender but he won and ported his secured loan/mortgage after we gave him a few tips:

http://forums.all-about-debt.co.uk/s...l=1#post220977

[LippyKid]

Re: Selling house with a secured loan

21 day problem solved inadvertently as new owners have to complete later than we thought which helps us in this situ, however with FP their transfer form asks for mortgage details for new property but as they won't be a mortgage at least initially they are having difficulty accepting this transfer/porting.
Not sure what I should be saying to them now gonna look through that link see if there any clues in there or if anyone can help with advice what to say to push this through I would be most grateful.

[PlanB]

Re: Selling house with a secured loan

with FP their transfer form asks for mortgage details for new property but as they won't be a mortgage at least initially they are having difficulty accepting this transfer/porting.

Who says First Plus "are having difficulty accepting this transfer/porting" because you won't have a first mortgage/charge on the new property?

Have they written to you to say that?

Are you jumping to negative conclusions?

They are asking the question because a second charge lender normally has to seek permission from the first charge lender to add a charge on the property. This is standard formality. It's very unusually (never happened to me in over 30 years of doing this stuff) for the first charge lender to refuse, but the second charge lender still has to seek permission.

In your case I would think the second charge lender would be over the moon to learn that there is no first charge lender because that means that they have a first charge on your new home.

Have I made sense?

[LippyKid]

Re: Selling house with a secured loan

Thanks again PlanB

You make perfect sense, I think it's just thrown them that they don't have to seek permission because there is no first charge, yes they should be over the moon you can see that I can see that but its getting them to see it! I'm trying to ascertain whether their procedures and processes can work with this situ.

They haven't put anything in writing either way, do you think I should just fill out out the form and leave the new mortgage details blank which will obviously generate a correspondence of some kind as we left it blank or do you think to phone again and discuss it verbally? end of the day I just need to keep them onside to grant us the transfer.

[PlanB]

Re: Selling house with a secured loan

I would write them a letter explaining the situation in which you express your "disappointment" that you were not made aware of your right to port the loan or given any information how to go about porting it. Tell them you found this quite by chance on their website after seeking advice (no need to say where the advice came from).

Fill out the form and add N/A in the bit about the first mortgage because it's not applicable since there is no first mortgage.

Attach the form to your letter and point out that they will be in an improved position (i.e. have a first charge instead of a second charge) once the loan is ported and they have alternative security. They won't know that unless you point it out to them. Give them the numbers. Tell them the value of the new property and remind them of the small loan (£28k?) and point out that this is only 25% (?) LTV. You're selling yourself to them so that they can't refuse your offer.

I would never do anything over the phone. You will be talking to people who are not the decision makers. You need to get your request in front of the underwriters and/or a manager in Customer Services. In fact most lenders have a specific porting department.

You need a paper trail. Write and ask them for what you want. Wait till they reply that you can't have what you want. Write back and ask them why they have made that decision. When you know *why* you can counter-argue it. Then make a formal complaint that they are being unreasonable and take it to the FOS.

I know some people prefer to get a quick fix over the phone and writing letters is hard work but that's the only way you are going to achieve your aim.