Can you sell with major negative equity?

scudzilla

A friend of mine has been renting from the same person now for 2 1/2yrs, they come round eveyr month and he pays them cash (rent)

The rent is 750/month, it's never late, he looks after the house as though it's his own, basically a model tenant.

Now the Landlord told him 2wks ago that he's thinking of selling up as his mortgage is 1,100 a month and it's just too tight (the area where he's in 750/m is the going rate, maybe slightly under)

He knows that the Landlowrd still owes approx 200k on the mortgage but the property is only valued at around 115k, will he be allowed to sell it or will the mortgage company refuse to allow this, happy with the payments coming in every month?

ytpe2r5bxkn0c1

He can sell if the balance can be agreed as an unsecured loan or he just clears the balance by other means. He may just want out of a money pit and is entitled to do so.

etoughguy

I agree with Srameen - depends on his payment history with his bank but it is possible he can sell the property

mel123

You have no idea of the LL personal circumstances, for all you know he can clear off his debt with cash so its probably better your friend at least starts looking now for alternative accommodation and seeing whats on the market to suit

hairyslug

If you take myself for example, I owed 195K and sold for 118K.
All depends on the LL financial situation

MarkAnthony

I doubt the bank have any idea the place is rented out, and it's likely that doing so is probably a breach of the terms of the mortgage.