I’m in deep trouble with my mortgage. Recently I saw an ad about exchange with delayed completion arrangements, which I thought could help, but my wife is worried it may cause us more problems than it solves. What should we do?
An exchange with delayed completion (EDC) arrangement may seem to offer a way out if you’re in mortgage arrears, but you should think carefully before entering into something like this, as there could be risks involved.
An EDC arrangement is where you agree a sale price for your home with a prospective buyer. Contracts are exchanged and the prospective buyer typically pays you an agreed deposit at that time. Completion of the sale is then delayed, often for a few years.
The buyer may offer to take over payment of your mortgage, but the mortgage stays in your name until the sale completes. The buyer may also offer to take over insurance costs and to pay for any repairs to the property.
If you move out of your home and the buyer or their tenant moves in, the arrangement is not regulated by the FSA. There may be a number of risks involved that you should be aware of. Your home could be at risk and you won’t have access to complaints and compensation procedures if things go wrong.
As the mortgage is still in your name, you’re still responsible for your home and the mortgage even if the prospective buyer takes over payments to the lender. If the buyer gets into financial difficulties, you’ll be responsible for any debts or missed payments and you could lose your home. You could be breaking the terms of your mortgage agreement if you need your lender’s permission first before going ahead with this type of arrangement. You could also be charged unreasonable fees that are not made clear at the outset.
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Before going down this road, get independent advice and explore other options for dealing with your mortgage problems that could be better for you and your family. For more information on how to sort out your mortgage problems, contact your nearest CAB or see the Citizens Advice website
www.adviceguide.org.uk.
West Devon Citizens Advice Bureau TAVISTOCK
Kingdon House, North Street, Tavistock PL19 0AN
Open Monday Wednesday 10-2pm & Friday 10.00am - 2.00pm
Drop in or ring 08444 111 444 during these hours. OKEHAMPTON
The Ockment Centre, North Street, Okehampton EX20 1AR
Open Tuesday Wednesday 10- 2pm & Thursday 10.00am-2.00pm.
Drop in or ring 08444 111 444 during these hours. Website:
www.westdevoncab.org.uk
West Devon CAB also offers “Drop In” Outreach advice sessions at Bere Alston Surgery and The Community Centre, Princetown, every 3rd Wednesday of the month. For further information, or to make an appointment, ring 01837 52105.
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