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When everyone has a home

Housing advice for Northern Ireland

Handing back the keys to your home when you're in debt

You should only give back the keys to your property if you're absolutely sure that there's no way you can keep your home.  Make sure you speak to an adviser at our Mortgage Debt Advice Service before you take this drastic step. If you hand over your keys, your debt will probably increase and it will be more difficult to get a mortgage in the future.

What happens to the money you owe after you hand back the keys?

You're still responsible for paying your mortgage until the lender sells your home to someone else.  Handing back the keys won't change this.  You'll also be responsible for paying the difference between what you owe on your mortgage and what your lender gets from selling the property.  Even though you've stopped living in the property, you'll still be responsible for paying:

  • the money left on your mortgage; including any interest and any arrears or debt you've built up
  • any penalty charges for missing payments
  • your endowment policy or ISA, if you have an interest only mortgage
  • the buildings insurance,

The amount you owe can increase since it may take a long time for your lender to sell your home. If you've given the keys back to your lender, you'll be responsible for these charges as well as the costs of paying rent on your new home. 

How much will the lender get by selling your home?

You will probably get more money for your house if you can sell it privately. If you surrender it to the bank, the bank will probably sell it at an auction.  Auction properties fetch much lower prices.  You may be able to take legal action if your lender sells your home for much less than it is worth, but you should get advice from a solicitor about this.

You will have to pay back everything you owe even if your home is sold for less than you owe. If you took out a mortgage indemnity guarantee with your mortgage, this might cover what you owe to the bank. Your lender can take legal action to force you to pay it back, even after the property has been sold.

Costs of selling your home

You normally have to repay any money your lender spends on selling your home. It can be expensive and usually includes:

  • auctioneers' fees,
  • estate agents' fees,
  • the cost of any repairs that are needed.

What happens to your benefits if the property is sold?

Your benefits will only be affected by the sale if you end up selling the property for more than you owe to the bank.  If this happens, any profit you make will count as capital or savings and this might mean your benefits are reduced or stopped.  Your benefits will normally reduce if you have more than £6000 in capital or savings and they will normally stop if you have more than £16000 in savings or capital. 

Moving on and finding somewhere else to live

If you have children, illnesses or any types of vulnerabilities, the Housing Executive may have a responsibility to find you temporary housing until you find a permanent home.

If you're in good health and you don't have any dependent children, the Housing Executive only has to give you advice on how to find a new home.  It won't be responsible for actually placing you somewhere.   You'll need to think about your other housing options and may want to try to find a privately rented home.