will these type of neg equity mortgages come back?

opinions4u

rover25 wrote: »

Also I wonder was there a maximum amount that these individuals were able to transfer into a new negative equity mortgage

Fairly sure the one I looked at was limited to 25% and £125k (e.g. max value £100k).

One would assume this would need to more than double now.

<shudder> at the risk profile!

Sim_2

We had one of these some 15 years ago - made for a bizarre situation where you had a maximum (maximum earnings multiples) and minimum (minimum needed not to push the total over 125%) purchase price range. We had to find a house priced between 61K and 65K - but it meant there were next time buyers in the market, which is precisely why this type of loan will be needed when things stabilise.

koexelek

People like C & G and Bank of Scotland used to to them up to 125% of the new purchase price.

I can see lenders risking offering these types of schemes in the short term future, while funds are short. It is just too high risk

opinions4u

koexelek wrote: »

People like C & G and Bank of Scotland used to to them up to 125% of the new purchase price.

I can see lenders risking offering these types of schemes in the short term future, while funds are short. It is just too high risk

Not even if it means retaining the same risk profile for the same individual customer and merely moving that to a new property?

koexelek

opinions4u wrote: »

Not even if it means retaining the same risk profile for the same individual customer and merely moving that to a new property?

Now that's a different matter.

I was thinking more of lenders taking on new borrowers from other companies with existing negative equity.

What you speak of is more of a possibility

rover25

Wondering Sim, how did you go about this? Did you have to have a buyer for your house before you could do this and how much did you have in negative equity?

opinions4u

rover25 wrote: »

Wondering Sim, how did you go about this? Did you have to have a buyer for your house before you could do this and how much did you have in negative equity?

The 1990s schemes that I was familiar with required you to have a buyer and complete simultaneously. The didn't allow you to increase the £ or % of negative equity.

What they did do was allow you to move house and take your negative equity with you to the new mortgage.

Sim_2

rover25 wrote: »

Wondering Sim, how did you go about this? Did you have to have a buyer for your house before you could do this and how much did you have in negative equity?

Details are a bit vague in my mind after all this time but we had spoken to Lloyds bank and knew where we stood, then got a buyer before we could apply formally and move our mortgage to them. Within a couple of years the market had picked up and we were no longer in negative equity.

maninthestreet

rover25 wrote: »

Wondering Sim, how did you go about this? Did you have to have a buyer for your house before you could do this and how much did you have in negative equity?

Yes, you had to find a buyer for your house. In my case, I had bought my house for £54,000 and had accepted an offer of £37,500 for it, so £16,500 negative equity. The house I was buying cost £98,500 , but I used £13,000 of my life savings to reduce the negative equity to £3,500. The sale of my old house and purchase of my property had to coincide, just like any other house sale/purchase.