- Mon Apr 28, 2014 9:48 pm
Hi and welcome
Basically who ever advised you is somewhat off the mark, however, there are some circumstances where you can which I will cover in a moment.
As a rule if you have a secured loan, unless it states otherwise in your agreement documents, then you cannot sell without permission of the lender.
I know you are offering to continue once you have sold, whist waiting for the new property, and then you are happy for the lender to get a new charge, but unfortunalty the lenders do not look at it this way. To them there is a risk you can sell up and then clear off abroad, which has happened in the past, or didn't get a new property so the loan is unsecured, and avoiding pay what is due to them, again this happens and unfortunately this one is quite common.
I am sorry but as a rule unless when you sell the sale price covers both the outstanding mortgage AND the charge held by the loan company, then they can and do routinely refuse.
However, you MUST read your agreement, some do contain the option to convert to an unsecured loan on selling (always with their permission first).
If the sale of the property covers the mortgage, then sometimes depending on the terms of the mortgage and the agreement, then the mortgage company can force an overreaching sale.
There is another aspect to this, when the buying solicitor finds the charge, they will want written confirmation from the lender that they are happy for you to sell. If they do not get that (and usually directly from the lender and not you) they will advise their client and their mortgage lender not to proceed.
There are a lot of people out there at the present time that are stuck in houses they cannot sell due to 2nd Charges, and until the equity improves they are having to keep the property.
But first things first, you MUST read your agreement to see what is says about selling, especially if they allow it and under what circumstances. Then you MUSTY talk to the lender to agree terms with them, remember all they are interested in is protecting their outlay