Negative equity problem

Adebisi

I bought my 2 bed room flat in September 2005 on a 100% mortgage for 83k - the mortgage as it stands now is 79.5k. The flat above has been repossessed a year ago and has not sold for the 69k price it is up for at the moment. I suspect my flat price will drop massively in the next few years. My problem is that I don’t want to be stuck here forever with a flat I can’t sell until I pay off the negative equity and loose lots of money. I could over pay my mortgage by 1k per month and reduce the period to 6 years (I would only have money for living costs and nothing else if I did this) but it seems like I would be wasting masses amounts of cash that I could have saved. Also if the flat above drops massively it may be bought or rented to nutters and that would not be fun at all. I feel like my life is now on hold.

I would rather be repossessed than the above. I have just signed up for 9 credit cards with a combined limit of 42k (and thinking of getting more plus maybe some loans) so I can max them out and go bankrupt if it gets to the point of no return (I have only ever had one credit card and never spent on it and never had a loan). This is a stupid back up plan I know but I am not sure if there is any other way out (if I rented it would not cover the mortgage). I don’t want to loose my job to go bankrupt as I love it but I also don’t want to be stuck here unable to sell and move ever. I am an idiot buying this dam flat!

PasturesNew

If you can pay down your mortgage, then you'll be in a better position to sell/move sooner.

If it's any consolation, my neighbour put their house on the market in Dec 07 at £75k, it finally sold at auction in Aug 08 for £55k - and to date the new landlord still hasn't managed to find a tenant. Even though it's the best flat in the block, although I've no idea what rent he wants it can't be more than this one is.

So, the best thing to do is: pay off as much of your mortgage as possible, as quickly as you can. That way, even if you're chasing the value down, you'll be able to move pretty much when you want and not have to hang around years for the value to come up again.

Robert_Sterling_3

Adebisi wrote: »

. I have just signed up for 9 credit cards with a combined limit of 42k (and thinking of getting more plus maybe some loans) so I can max them out and go bankrupt if it gets to the point of no return (I have only ever had one credit card and never spent on it and never had a loan). This is a stupid back up plan I know but I am not sure if there is any other way out (if I rented it would not cover the mortgage). I don’t want to loose my job to go bankrupt as I love it but I also don’t want to be stuck here unable to sell and move ever. I am an idiot buying this dam flat!

You have a problem but I do not think this is the best solution.

Dithering_Dad

Adebisi wrote: »

I bought my 2 bed room flat in September 2005 on a 100% mortgage for 83k - the mortgage as it stands now is 79.5k. The flat above has been repossessed a year ago and has not sold for the 69k price it is up for at the moment. I suspect my flat price will drop massively in the next few years. My problem is that I don’t want to be stuck here forever with a flat I can’t sell until I pay off the negative equity and loose lots of money. I could over pay my mortgage by 1k per month and reduce the period to 6 years (I would only have money for living costs and nothing else if I did this) but it seems like I would be wasting masses amounts of cash that I could have saved. Also if the flat above drops massively it may be bought or rented to nutters and that would not be fun at all. I feel like my life is now on hold.

I would rather be repossessed than the above. I have just signed up for 9 credit cards with a combined limit of 42k (and thinking of getting more plus maybe some loans) so I can max them out and go bankrupt if it gets to the point of no return (I have only ever had one credit card and never spent on it and never had a loan). This is a stupid back up plan I know but I am not sure if there is any other way out (if I rented it would not cover the mortgage). I don’t want to loose my job to go bankrupt as I love it but I also don’t want to be stuck here unable to sell and move ever. I am an idiot buying this dam flat!

No, you're an idiot if you do this. Instead of being in a bit of negative equity you'll be declared bankrupt and possibly be convicted of fraudulently obtaining loans that you had no intention of repaying.

So let's look at the alternatives. You either overpay your mortgage to the point where you can sell up without owing any money and you learn never to get a 100% mortgage again. Or you wipe out your credit rating and have almost every thing you own taken away from you by the OR and you possibly get a criminal record.

Hmnnn, :think: tough choice.

I suspect though that this is merely a troll post because I can't imagine you getting 9 credit cards in a credit crunch and I can't imagine anyone being stupid enough to do what you're proposing, to be honest.

Thrugelmir

Adebisi wrote: »

I bought my 2 bed room flat in September 2005 on a 100% mortgage for 83k - the mortgage as it stands now is 79.5k. The flat above has been repossessed a year ago and has not sold for the 69k price it is up for at the moment. I suspect my flat price will drop massively in the next few years. My problem is that I don’t want to be stuck here forever with a flat I can’t sell until I pay off the negative equity and loose lots of money. I could over pay my mortgage by 1k per month and reduce the period to 6 years (I would only have money for living costs and nothing else if I did this) but it seems like I would be wasting masses amounts of cash that I could have saved. Also if the flat above drops massively it may be bought or rented to nutters and that would not be fun at all. I feel like my life is now on hold.

I would rather be repossessed than the above. I have just signed up for 9 credit cards with a combined limit of 42k (and thinking of getting more plus maybe some loans) so I can max them out and go bankrupt if it gets to the point of no return (I have only ever had one credit card and never spent on it and never had a loan). This is a stupid back up plan I know but I am not sure if there is any other way out (if I rented it would not cover the mortgage). I don’t want to loose my job to go bankrupt as I love it but I also don’t want to be stuck here unable to sell and move ever. I am an idiot buying this dam flat!

You've got a job. Have an affordable mortgage that you could afford to overpay. So what's your issue?
A lot of people have real problems currently that are far worse than worrying than about who your next neighbour's going to be.

lana22

Adebisi wrote: »

I bought my 2 bed room flat in September 2005 on a 100% mortgage for 83k - the mortgage as it stands now is 79.5k. The flat above has been repossessed a year ago and has not sold for the 69k price it is up for at the moment. I suspect my flat price will drop massively in the next few years. My problem is that I don’t want to be stuck here forever with a flat I can’t sell until I pay off the negative equity and loose lots of money. I could over pay my mortgage by 1k per month and reduce the period to 6 years (I would only have money for living costs and nothing else if I did this) but it seems like I would be wasting masses amounts of cash that I could have saved. Also if the flat above drops massively it may be bought or rented to nutters and that would not be fun at all. I feel like my life is now on hold.

I would rather be repossessed than the above. I have just signed up for 9 credit cards with a combined limit of 42k (and thinking of getting more plus maybe some loans) so I can max them out and go bankrupt if it gets to the point of no return (I have only ever had one credit card and never spent on it and never had a loan). This is a stupid back up plan I know but I am not sure if there is any other way out (if I rented it would not cover the mortgage). I don’t want to loose my job to go bankrupt as I love it but I also don’t want to be stuck here unable to sell and move ever. I am an idiot buying this dam flat!

Of course it's way more likely to be bought by nutters if it drops in price:rolleyes:

Lotus-eater

Dithering_Dad wrote: »

No, you're an idiot if you do this. Instead of being in a bit of negative equity you'll be declared bankrupt and possibly be convicted of fraudulently obtaining loans that you had no intention of repaying.

How often does this happen? Looking now and again on the bankruptcy and debt free wantabe board, it doesn't seem to be that way?

Asheron

Ok, you have lost 20,000 pounds on your investment
If you start using credit cards to pay your mortgage you are in deep trouble,
I suggest you sell your property now, You will have lost 20,000 but could pay this off over a few years.
Property values will continue to drop as much as 50% in the next 3 years.
It’s not easy to claim bankruptcy in 2009, they changed the laws in 2006.
You won’t be able to wipe your sleight clean!
You must decide are you willing to sell and owe 20,000? Or wait build up more debt, property continues to de-value and you owe 40,000?
Take the 20,000 hit,

kai666

Houses prices will go up again at some stage, just sit it out surely? Why sell just because prices are currently dropping , or get yourself in a right mess over that card idea

What goes down, must go up

It's a gamble every time you get new neighbours. Nutters don't only buy on a downward market!

Graham_Devon

Probably the most selfish option that you could think of.

You are now like thousands of people across the UK, including myself, so believe me, I know your problem. However, doing that would be, not only the most selfish, but also the weakest way out of the problem you face.

What you are propsing, is theft, for your convinience. As you are "planning" or would plan to do this, you may not find bankrupcy so easy, but you may find it an easy route to fraudulent activities and a one room all expenses paid room, at the courtesy of Her Majesty.

Asheron

Just want to make this clear....
You cannot claim bankruptcy in 2009 like back in 2001, the laws have changed!
Please research this before making a decision.