You can sell your home at any time, as long as you can afford to. Why Would a Mortgage Company Take a Picture of My House? Now What. The simple answer is yes, but if you’re one of those sellers, keep reading. Chris Torney However, if the new home is worth less than your old one, the provider may decide that it is not willing to lend quite so much against it, so you may have to repay some of your equity release loan early. If you’re redeeming your mortgage in full and not buying another property, you must make sure that the sale price is higher than the amount remaining on your mortgage loan. Typically, equity release companies do not lend on retirement homes, and there may be restrictions on the type of flat you can move to as well as how the property was constructed. If there's more than £6000 equity and you move out, your benefits could reduce or stop. If you want to move house, your provider should be able to transfer the debt to the new property. Melly Parker has been writing since 2007, focusing on health, business, technology and home improvement. According to Credit Sesame, the drop is usually more significant for those with high starting scores. Recourse borrowers owe the full amount of the mortgage even if they deed the house back to the bank. Authorised and regulated by the Financial Conduct Authority. Put the house on the market for at least 90 days. © 2020 Shelter, the National Campaign for Homeless People Limited. While selling your home before foreclosure would be a better option, surrendering it to the mortgage company can help remove you from your payment obligations. Ask that your remaining mortgage debt be forgiven even if the auction of the home doesn't bring as high a price as you owe. The above article was created for Telegraph Financial Solutions, a member of Telegraph Media Group Limited. A deed in lieu of foreclosure is one way for homeowners to avoid a foreclosure by willingly giving their home to the lender. For example, if you've moved out after a recent relationship breakdown or you’re taking reasonable steps to sell the property. If you hand back your keys and move out before you need to, the council might decide you're intentionally homeless. You will only be able to transfer your equity release deal to a new property if it meets the standards laid down by your provider. Our advisers will only ever recommend products that meet the highest standards of customer protection. Provided by HUB Financial Solutions Limited. It's possible that your mortgage lender will agree to this since you aren't able to make your current mortgage payments. If you want to move to a house that is significantly cheaper than your existing property, the lender might decide it is not willing to lend as much against it. There are some properties that equity release providers might not be able to accept if they can’t be easily sold in the open market when your plan finishes, for example retirement homes. When you sell your home for cash, you can expedite the closing process by eliminating the financing and appraisal contingencies from the contract. If you stop making the mortgage payments, the lender can seek foreclosure and repossess the property. First, ask your mortgage lender about your current mortgage payoff when selling a house. Products are becoming increasingly flexible, with a range of new features on the market. If you have any plans to move to an unusual property in later life, flag this to your adviser who will advise accordingly.”. “The downsizing protection features allow customers to downsize at a time that suits them, rather than being forced to by financial needs,” Mr Wilkie adds. Even if you’re not expecting to move, it is well worth checking with any provider in advance to see what their policy is on being able to transfer an equity release deal to a new property. You can help Shelter by sharing your story with us. But what happens if you want to move house after you have taken out an equity release plan; for example, if you need accommodation more suitable for your needs as you get older? Credit Sesame: Foreclosure and Deed in Lieu of Foreclosure - My Credit Score Took a Huge Hit. They will prepare forms that transfer the deed from you to them. This affects how much help you get from the council. Benefits won't usually be affected if you’re in negative equity or would get less than £6000 after a sale. What Happens When a Bank Charges Off Your HELOC After a Chapter 7 Discharge? We rely on advertising to help fund our award-winning journalism. If you can no longer afford your mortgage payments, it may be time to surrender your home to the mortgage company. Read More: Ways to Prevent the Loss of Your Home in Chapter 7 Bankruptcy. The security instrument acts to secure the property itself as collateral. If they do, ask them to sign an agreement that says the mortgage will be forgiven after the auction. Having the room to accommodate a growing family for visits is helpful before ‘rightsizing’ later in retirement. State laws determine when a lender can start the foreclosure process and whether a judicial ruling is required. ... there’s a chance that even if you find a buyer, they could back out under an escape clause written into the contract. More and more people are choosing to release equity from their home in order to give themselves a cash boost as they near retirement, but what happens if you decide to move? Find out why voluntary repossession is not recommended. Attend a meeting with your mortgage holder. He now works as a freelance writer for a wide range of business and finance publications. Interested in finding out more about Equity Release? Laws vary from state to state, but in most places you will need to have listed the house for three months, have no liens and have made the offer to the mortgage company on your own. By signing the promissory note, you acknowledged that you owe the lender the amount borrowed plus interest. If you move to a less expensive house or flat, the provider may require its share in the new property to be increased proportionately so it has the same current value as its share in the original home. Does a Sunroom Addition Raise My Property Taxes?→, What to Do When Your Mortgage Company Rejects a Loan Modification Proposal→, The Impact of a Short Sale on My Credit Score→, Reviewed by: Alicia Bodine, Certified Ramsey Solutions Master Financial Coach. Please check again between 9am - 5pm Monday to Friday. What happens if you want to move house after you have taken out equity release?