what is considered negative equity?

jellygirl_2

Hi all - just wondering on what constitutes negative equity - my situation is that I have a house with mortgage and secured loan (2nd charge) - at the moment the house is probably worth about 4k more than I owe on the mortgage (so no neg equity there), however the secured loan has a balance of around 20k.

Is my house classed as being in negative equity seeing as I have a mortgage and secured loan totalling 15k more than the house is worth? Or is it what is owed on the mortgage only which determines this (of course depending on house price) - hope it make sense, any advice would be very welcome:)

skylight

Yes - your house would be in negative equity.

Basically, its the value from a sale, less mortgage outstanding, less any secured loans outstanding, less sales fees (solicitors/estate agents etc).

If you are looking to try to keep the house, you will need to ensure that the mortgage and secured loans are paid for and up to date (or at least an agreed repayment schedule), as the latter tends to be the mortgager repossessing rather than the OR kicking you out (which in itself is rare).

If its agreed you are in neg equ, then you can buy the beneficial interest from the OR for a nominal sum of £1, plus fees of approx £223ish each (mean "each" as in if 2 people own and 2 are going BR).

jellygirl_2

skylight wrote: »

Yes - your house would be in negative equity.

Basically, its the value from a sale, less mortgage outstanding, less any secured loans outstanding, less sales fees (solicitors/estate agents etc).

If you are looking to try to keep the house, you will need to ensure that the mortgage and secured loans are paid for and up to date (or at least an agreed repayment schedule), as the latter tends to be the mortgager repossessing rather than the OR kicking you out (which in itself is rare).

If its agreed you are in neg equ, then you can buy the beneficial interest from the OR for a nominal sum of £1, plus fees of approx £223ish each (mean "each" as in if 2 people own and 2 are going BR).

thanks:) Yes, Im up to date with the payments and want to keep the house if I can - theres only me so all looks good then - Im in neg equ then - thanks very much for the info:)