Negative Equity

lisgil

My husband and I are looking to move to Yorkshire from Lancashire. We own a two bed terrace and we paid £81k for it two years ago. We have just come out of a painful valuation to find the guy reckons its worth about £75k. I was expecting to sell for about £82k so this was a shock, to say the least! We are really looking for a quick sale and to this he suggested £70k!

We have found a property in Yorkshire we want to buy (stupid, you may say, but we fell in love with it) which is on for £155k, but we wld offer around £135k. We have £7k for a deposit and about £3k for fees but at this moment we do not have enough to pay the equity back for our property (altho this may be resolved next month when my husband makes his commision).

The guy who valued the property today suggested we let to buy and then rent in yorkshire - which is not what we want to do. Also I think let to buy mortgages are looking for 20% deposit, if not more, and we don't have it.

Basically I need an angel to solve all my problems for me!!!! I was hoping to sell ours quickly and get a 95% mortgage through someone like First Active or Nationwide and move before Xmas. Now it just seems impossible and I don't know what we can do.

I'm sorry if this is not a relvant post but I need some advice, if there is anyone out there who has any!

Thanks in advance.

Lisa

_Andy_

Hi Lisa and welcome to MSE forums.

To give us a bit more of an idea about whether the 95% mortgage is feasible, can you let us know what your incomes are and also if there's been any credit issues (i.e. missed payments on anything, defaults, CCJs, etc.)

Thanks

lisgil

Hi Andy

My husanbds income is £52k per annum, mine is £13,500.

We have no bad credit issues.

logie28

dont mean to sound nasty,, but you want to drop the seller of the house your after ,, by twenty grand. But expected yours to sell for more than you paid for it!!

The whole markets in a wonky state at the minute. my advice would be to wait while the market settles. Only when first time buyers get confidence( and offered a mortgage) will the market start to pick up..

Our house is up for sale, we are taking it off the market,., I'm willing to drop our property to a realistic price . The sellers in the market we are looking to buy into wont or cant drop to a realistic market valuation, for what ever reason, mostly negative equity!

The people who will win in this current market will be , patient first time buyers.. I'm afraid the equity boat left a while ago..

Swings and roundabouts. I would say if you cant afford to move now.. dont move yet.

lisgil

Thanks for the reply, Logie. A year ago we could have expected up to £90k for our house so I did think expecting £10k less wasn't too unreasonable, but I appreciate your point.

_Andy_

Well the 95% mortgage shouldn't be an issue.

With your current home obviously you won't be able to mortgage to another lender. If you did want to keep it you could consider asking your current lender for 'consent to let' but really if you're already in negative equity and the market is dropping, you might be better off just selling ASAP.

RichOneday_2

Much as I can understand your desire to move from grotty Lancs to God's Own Country, it would seem that the best advice for you is to be patient.

I know you've fallen in love with a particularly property but there will always be another one.

In terms of house prices factor in another 25-30% drop over the next 3 years (there is plenty evidence pointing to worse than this).

As you're looking at trading up, any 'across the board' house price falls are to your advantage so sit it out and see every news item about house price falls as money in your pocket.

dimbo61

Can you part -ex with a builder in yorkshire ?
plenty of new homes not sold and you are going up a big step in the property ladder.
Your husband is earning a good income so overpay on mortgage ( if allowed ) and save like mad into ISA,s over the next couple of months while you see if you can find the right house and get a mortgage on it.
Go for a long term 5/10 fixed rate deal so that you can build up the equity in your new home and have security of knowing how much your mortgage payments will be over the next few years.
If your house has gone down in value what has a brand new 3/4 bedroom detached worth if the builder is desperate to sell or part ex ? GOOD LUCK