Negative Equity - Can I move my Mortgage?

freeglide

I purchased a property in Hampshire in June 2007 for £210k, it is now worth anything from 178k-190k at best.

I want to move to East Anglia and have 194k balance on my mortgage. I still want to move and buy a place for about 175-200k. Can I still move with my mortgage even though my property will not cover the mortgage balance and how will this work?

I have no debts and have about 15k in other savings to use.

Please advise?

Freeglide

_Andy_

In short, no you can't.

beecher

You would have to come up with the shortfall and then take out a new mortgage. Remember you'd also need at least a 10% deposit for your new place so if you use all your savings for the shortfall you'll have to come up with a further £17,500-£20,000

maninthestreet

You would need to raise the funds to pay-off the negatvie equity, whatever that amount would be.

skintandsad

Many years ago (back in the recession of the 1990's), some lenders set up a scheme to help people in negative equity. This enabled them to move to another house, worth the same or more than your existing house, with a value of up to 125% of the outstanding mortgage, and take their negative equity with them

The thought process was, that provided the new property was worth the same as, or more than the existing property, and the level of debt didn't increase, the banks would be no worse off - and it might help keep the house market moving.

These schemes helped thousands of people move at the time. Whether the lenders might again re-introduce this type of scheme, I don't know - I suppose you could ask?

freeglide

Thanks or the heads up skintandsad!!

Does sound like a good idea but I dont want take a hit on this property. I have been looking into 'consent to let' and renting out my existing property and trying to just buy another place instead! Some lender want very high LTV rates to allow you to let, but will see what I can work out.

FG

beecher

If you're buying another place, you must have a deposit saved. If might be a better option to pay off the negative equity with that money, and rent instead. I'd worry you're going to take a bigger hit by holding onto it, and can't see you being able to get a BTL mortgage while in negative equity.