What are your experiences with Negative Equity...

SuzySu

This is a situation that I find myself in at this moment, and it's not at all pleasant.

We bought our house in 2003, remortgaged....took out a secured loan (yes...I know!) and now our monthly outgoings for the morgage + secured loan are over £2000 a month.

We need to sell as we can't afford this and agreed a price back in April. Buyers came back last weekend and dropped their offer by £10,000 which takes us into negative equity.

Our only option is to write to our secured lender and ask for the shortfall to be transferred to an unsecured loan. They have to put this past their lenders, and we are still waiting for their decision.

The buyers have given us until Monday to respond. Will update when we have further news.

mlz1413

neverdespairgirl wrote: »

Sounds tough - a really stressful commute (and you had to end it in Bracknell! Yuck!)

Interest rates weren't 15%, though, for most of 1992, they were 8 - 10 %

I bought a place in 1988 and took out a fixed rate at 11.95%, real glad of that when rates hit 15%! but then the rates fell and when the term ended 2 years later rates were around 8%, which meant I had broken even with my fixed rate and my payments came down giving me the chance to live a little and save some money too.

Incisor

pinkshoes wrote: »

... So long as you live within your means, and have a sensible life plan, then who cares??

I'm not gonna give up my home, or pull out from when I bought, just because I MIGHT end up in negative equity. If it happens, it happens, and I'll stay put. If worse happens, then I'll cross that bridge when I come to it.

It's about recognising and managing the risk

Should I start driving with an oxygen mask just in case all the fumes from other cars give me cancer?

But neither would you start an asbestos manufacturing business in your front room

Should I stop driving my car just incase someone crashes into it? (Doh - that already happened - too late!)

You wouldn't even stop driving if you had had twice a sensible amount in a pub?

Should I wear a crash helmet when I go out drinking just in case I fall over and hit my head on the pavement?

That's managing the consequences. You manage the risk by not drinking to excess

Owning your own home is marvelous! Have you also not read all the threads about those having to move every 6 or 12 months as landlords issue S21s? If negative equity is the worst that can happen, then so be it! It's just money! I put sanity and happiness first I'm afraid!

I agree with putting happiness and sanity first. But like drinking, you manage the risk by not drinking to excess - or not trying to buy with a deposit of £250. You also manage the consequences by not mortgaging to 5.5 times income to get a 4 bed, if you can get a 2 bed at a much more reasonable multiplier.

emma12345

Back in 1993 I'd just had my first baby. We lived in a 1 bed flat bought for £51K two years before but they were now selling for £38K. Mortgage was £42K. We were in negative equity.

The flat was so small we had to climb over our bed to get to the cot. We were both working, I was working up to 12 hrs a day in London, but we were trapped, we couldn't afford to move. Flat was by a main road and my son developed asthma (it almost completely went when we eventually moved out to the suburbs). We had expected to be in a position to be able to buy a house by this point but had obviously messed up badly.

How did we get out of it? In 1997 just before my son was due to start school full time (we were trapped for a looong time!) we bought a v cheap house for £67K. We had had offers on the flat previous to that of £40K but couldn't afford to sell and buy somewhere else to live. So we took out a Let to Buy (not buy to let) mortgage with Mortgage Express and got the house, let out the flat for a year while waiting for prices to rise again (ever the optimist!).

A year or so later in 1999 we sold the flat for £51K, the price we had bought it at years before. Three year's later I saw that flat on the market for £150K, I've been kicking myself every since!!!

Still we haven't done so badly, houses similar to the cheap old house we bought sell for well over £200K now and this time I'm not in negative equity.

I feel for anybody who is in negative equity and has to move, it was a very stressful time.

eden37

Bought a flat in Gateshead on my own in 1992 for £23k met husband in the same year and moved out renting the flat in 1994.Rented it out untill 1999 but as the area had declined found nobody decent wanted to rent it . Sold it for £11k as I had paid off the mortgage by then due to employer shares doing really well and using the rent to overpay the mortgage. I was just glad to be shut of it to be honest ! Used the money to move in 2000 to a house for £63k which we sold in 2003 for £153k. If I hadnt sold the flat when I did we would never have moved. We now owe £43k on a house worth £170-£180k and are staying where we are!!!I can remember the stress at the time when tenants caused damage/didnt pay rent and the relief when it was sold!

ms.prong

neverdespairgirl wrote: »

Sounds tough - a really stressful commute (and you had to end it in Bracknell! Yuck!)

There is nothing wrong with Bracknell!

mpsavuk

Negative equity is only a problem if:

You need to remortgage
You are being repossessed
You really need to move (Change of job etc)

Otherwise everything in Gordon Browns economic "no more boom & bust" Utopia is all sunshine and easter bunnies!!

maninthestreet

ms.prong wrote: »

There is nothing wrong with Bracknell!

What was worse - living in MK or working in Bracknell?
Both are great places to come from, but terrible places to go back to.

pinkshoes

Incisor wrote: »

It's about recognising and managing the risk


I agree with putting happiness and sanity first. But like drinking, you manage the risk by not drinking to excess - or not trying to buy with a deposit of £250. You also manage the consequences by not mortgaging to 5.5 times income to get a 4 bed, if you can get a 2 bed at a much more reasonable multiplier.

pinkshoes wrote: »

So long as you live within your means, and have a sensible life plan, then who cares??

So basically you agree then, and are arguing the same point?

Indeed we didn't overstretch ourselves, we put down a decent deposit, and we bought because interest on mortgage was cheaper than renting!

I guess if we wanted to move and had negative equity, we'd just rent it out instead of selling.

I've been through a lot in life, and have come to realise that money has very little significance in life if you live within your means.

sympatex

hehe I live in Sandhurst near breacknell. The town it self in terms of amenities has loads of decent stuff there, cinema, shops, ski slope, swimming pools (Activity and proper), expensive tennis clubs (raquets), national trust woodland walk areas and the like. Good to visit but personally would never live there in a million years.