if i sell my house can i do what i want with the banks' mortgage money

[bobby]

I have a mortgage for about 120K.
I have paid off about 5k already (so owe the bank around 115k).

If I were to sell my house for about this sum (115k),
could I do what I want this money?

e.g. put it on a horse, invest in shares (and rent instead), rather than buy another house?

Or is the mortgage only given on the proviso that it's tied up in bricks and mortar?

Would I ever see this money or does it stay in the hands of solicitors ?

[Trades MASTER]

Forgive me if i am wrong but you say owed the bank £120,000
you have paid off £5,000
and you now owe £115,000
so if you sell now for £115,000
minus fees legal and estate agents
apporx £1000
you will be £1000 out of pocket.

[Dav_Oak]

Trades MASTER is right.

A mortgage is a loan secured against a property. As soon as you sell your property the money is transferred from the buyers solicitor to your solicitor. Your solicitor will then repay the mortgage in full to the lender and pay you whatever is left over.

Based on the figures above if sold at £115,000 you would certainly find yourself making a loss and be in debt to the tune of a few thousand pounds. There would be mortgage redemption fees, this can vary depending whether your tied into your current deal (£250-£4000), then solicitor fees (£500-750) and estate agency fees (£1000-£2000).

[bobby]

thanks, I was just using the figures as a guide (the sale could vary either way).

but the main point i was interested in was - would i ever see the actual sum ?

this suggests not:

...the money is transferred from the buyers solicitor to your solicitor.

But what happens in a private sale without solicitors involved?
what's the problem if I continue to meet the mortgage payments?

[Jeannie D]

It's perfectly possible to sell your house privately without involving estate agents but I have never heard of a private house sale that did not involve the services of solicitors or conveyancers. In any case, there will be a clause on the title register for your house which will stop you from selling your property to someone else without the written consent of your mortgage company. This means that the Land Registry will not transfer the title, or ownership, of your house to your private buyer without the mortgage company's say-so - and they will only consent if they get their money back. Sorry, it just can't be done.

[New Homes Expert]

There must be lots of banks and building societies all over the country going to extensive measures of affordability checking and mortgage rationing.

I expect nearly all of them are more than happy to hand over vast sums of money to home buyers without any security or charge on the property.
So go ahead and sell and run away with all the lender's money!

Seriously, ALL HOME LOANS are secured against your property.
You cannot sell a mortgaged property or any property that has a charge by the lender on the title deeds. This means they get their money back FIRST

[Dan S]

Hi Bobby

We're not taught this sort of thing in schools so it's not immediately obvious. Forgive me but you sound a little confused as to how buying homes with mortgages fundamentally works. Again, not to worry because unless you've had it explained to you, why should you know!

We have an easy section on How Mortgages Work that should answer your question. Scroll down to 'How Does It Work When I Want To Sell My Home?'

All the best

Dan S

Dan S

[Trades MASTER]

The way im reading your post is this, you want a private sale, you want to continue to make the mortgage payments, so your suggesting you want to sell the house on the side so you get the money but maintain the payments ? am i correct ?
if so you will end up locked up!

[New Homes Expert]

TMC is right!

[Dan_Manchester]

Sounds like you're trying to skip the country with £115,000 rather than pay off the mortgage.

Good luck!

Do write from prison...