Hello SkintAlly.

If your current home was sold would there be any profit (or loss) on the sale after the mortgage is repaid?

hi skint ally. There is nothing to stop you moving home whilst in a trust deed however there are a couple of important points to note:

1) Your share of any equity released as a result of the sale of the house will be taken in to the trust deed for the benefit of creditors.
2) If you can no longer afford the payments you had offered to creditors then your trust deed could be terminated

There is 5-10k negative equity in the property. i was assuming this would go into the trust deed. would it be possible to rent the flat out and try and get something for the same money else where?

Are you in a trust deed just now?

Paul

Hi Plasthurtic Daft, yes, my trust deed started in Sept last year

Hi SkintAlly.

You may wish to read some of the threads where trustdeed1 has been tackling a situation that is in some ways similar to this one.

There are quite a few potential issues here that you'll need to have a think about if you wish to sell the current property.

One such issue is whether your mortgage lender will be prepared to allow you to sell the home at a loss.

As a loss on the sale will create a new trust deed creditor, your trustee may not be supportive of the idea either (as the funds paid into your trust deed will need to be spread around more creditors than originally expected).

Your trustee may also have concerns about a decision you make voluntarily which results in your trust deed payment having to reduce (because rent will cost more than your current mortgage).

Renting out your current property, and then renting a new home, may be easier all around.

Perhaps it's worth contacting your trustee to talk through both ideas and to judge their reaction?

Thanks for the advice TDA, i'll give them a call later. Im hoping for a promotion at work soon, so i was thinking that i might be able to cover any costs that way. ill need to do something tho because the neighbours are cause my partner quite a bit of stress. so much so that she wants to leave with or without me.

I hope the call goes well SkintAlly.

A promotion and increase in income might create a little more leeway provided that your trustee feels all parties are being treated fairly.

Seem like i would be able to let and then rent for the same value. If can earn more money then it might be possible to rent something a bit more costly but this would need to be looked at so that it is fair for all parties.

The next problem though is the mortgage. i don't think i will be able to convert to buy. to let. especially with NRAM?? does any know of cases where this has been permitted?

You can request 'permission/consent to let'-in writing mind!
It is unlikely you will obtain a Buy To Let mortgage in these times.

For my tuppence worth-don't make the mistake of thinking you only need to let out your current property for an amount equal to the new rent. As a rule, you can only count on 11/12 months rent, you will have costs relating to letting such as Safety certificates, Landlord registration, Insurance, Marketing and Repairs. That's just the certain costs. This is why lenders ask for proof that the market rent is 125% of the mortgage payment (sometimes 130%)
If you write to request consent to let, request to also switch to interest only payments if you have a repayment mortgage to help with covering your costs.

Oh right, i didn't know that, thanks for the info. I was going to make some enquiries today.

I was reading Trustdeed1's threads and got a bit confused with the voluntary repo. it seemed to be the case that if you ask for it, then lender and trustee would say no. But if you simply write them both saying this is what i'm doing then it is ok??? I'm confused lol

Hi SkintAlly.

It is confusing.

I think the reason trustdeed1 has been able to get all of this arranged has been that they have been prepared to be very persistent and patient in the face of quite a lot of resistance. Pushing for a voluntary repossession in this way may not be the easiest way forwards (though that doesn't necessarily rule it out on its own).

I think Pamjo is 100% correct that you'll struggle to get a buy-to-let mortgage based upon the information you've provided so discussion with your existing mortgage lender seems appropriate.

I guess the lender might not wish to take possession of the property, but then again if you have stopped paying the mortgage then what other choice do they have if they want to get as much of their money back as possible?

How would my trustee deal with that though Kevin? would they accept it or would they pull out?