Negative Equity

MACDONALDO67

Well coming to an end of my current 2 year deal and I thought i'd take the time to call my provider, Abbey, to see what offers there were for me.

Was looking at 2,3,5 and 10 year fixed deals.

Unfortunately I am not entitled to ANY of the deals on the market because the house prices have dropped.

So now Abbey determine that the house prices for our area are approximately £240,000 and we owe £242,000, having bought the house at £276,000 in December 2006 when the house prices were still going up.

For me to get a stable deal I would have to find £53,000. Until then I am stuck on the SVR, which is at 4.69% (Of which Abbey have failed to pass on and held back on 1.6%.)

So although having a mortgage for many years, never fallen behind, never missed a payment, always reliable........ that stands for nothing.

My concern now is if the interest rates went up in the future and house prices stayed down. There is no doubt about it we would be f****d because no deal, big negative equity and sure fire repossession.

So it's SVR for the time being with a view of trying to pay a bit extra off each month providing the !!!!!!!s pass on the rate.

I hate banks. Well done! :T

I hate this Government (and I voted for them for the past 20 years, more fool me) . Well done! :T

I am now part of the negative equity party. My fault as well I suppose. :mad:

Just hope my Premium Bonds ship comes in..... now there's a laugh for ya! :rotfl:

1978

MACDONALDO67 wrote: »

So now Abbey determine that the house prices for our area are approximately £240,000 and we owe £242,000, having bought the house at £276,000 in December 2006 when the house prices were still going up.

are abbey another lender who use that god awful halifax valuer software rather than giving proper valuations?

MACDONALDO67

1978 wrote: »

are abbey another lender who use that god awful halifax valuer software rather than giving proper valuations?

I think they are. They have calculated a 13% drop on what we originally paid in December 2006. This has wiped out all our capital saving / gain.

Somebody has made out of this crash and it isn't the little people.

beecher

Having had a mortgage for a long time and never missed a payment was never going to be enough to get another deal if you're in negative equity I'm afraid. You bought pretty much at the peak with a high LTV unfortunately. All you can do is rebudget so as you can afford the payments when they go up. You could go onto the Debt Free Wannabee site for help with this. Is renting out a room an option for you?

Fliss_M

MACDONALDO67 wrote: »

So although having a mortgage for many years, never fallen behind, never missed a payment, always reliable........ that stands for nothing.

My concern now is if the interest rates went up in the future and house prices stayed down. There is no doubt about it we would be f****d because no deal, big negative equity and sure fire repossession.

So it's SVR for the time being with a view of trying to pay a bit extra off each month providing the !!!!!!!s pass on the rate.

Erm, yeh. Your not the only 1 and you wont be the last.
Just because you pay ontime doesnt mean they owe you a good rate. Am in neg equity myself. Am just lucky my rate after fixed was a tracker. Just be thankful your with Abbey. There are those who are with other lenders on higher SVR's. A&L for example. Owned by the same Co., passed on less then Abbey.
We can only hope then when rates rise house prices do too, or were all scuppord

MACDONALDO67

beecher wrote: »

Having had a mortgage for a long time and never missed a payment was never going to be enough to get another deal if you're in negative equity I'm afraid. You bought pretty much at the peak with a high LTV unfortunately. All you can do is rebudget so as you can afford the payments when they go up. You could go onto the Debt Free Wannabee site for help with this. Is renting out a room an option for you?

Thanks for info. We are not in the !!!! yet but if interest rates go up to 7,8,9%+ then we will be.

Don't fancy renting a room out so rebudget and sell a few things is an immediate option.

As for the Wannabee site I'll keep that one up my sleave... along with the site address for Shelter as well.

maninthestreet

MACDONALDO67 wrote: »

Well coming to an end of my current 2 year deal and I thought i'd take the time to call my provider, Abbey, to see what offers there were for me.

Was looking at 2,3,5 and 10 year fixed deals.

Unfortunately I am not entitled to ANY of the deals on the market because the house prices have dropped.

So now Abbey determine that the house prices for our area are approximately £240,000 and we owe £242,000, having bought the house at £276,000 in December 2006 when the house prices were still going up.

For me to get a stable deal I would have to find £53,000. Until then I am stuck on the SVR, which is at 4.69% (Of which Abbey have failed to pass on and held back on 1.6%.)

So although having a mortgage for many years, never fallen behind, never missed a payment, always reliable........ that stands for nothing.

My concern now is if the interest rates went up in the future and house prices stayed down. There is no doubt about it we would be f****d because no deal, big negative equity and sure fire repossession.

So it's SVR for the time being with a view of trying to pay a bit extra off each month providing the !!!!!!!s pass on the rate.

I hate banks. Well done! :T

I hate this Government (and I voted for them for the past 20 years, more fool me) . Well done! :T

I am now part of the negative equity party. My fault as well I suppose. :mad:

Just hope my Premium Bonds ship comes in..... now there's a laugh for ya! :rotfl:

Why would repossession be 'surefire'? 4.69% isn't that bad an interest rate.
How high would interests have to go before you would find it impossible
to pay the mortgage? The best suggestion would be to make over-payments now whilst you are able to.

ILW

MACDONALDO67 wrote: »

.

My concern now is if the interest rates went up in the future and house prices stayed down. There is no doubt about it we would be f****d because no deal, big negative equity and sure fire repossession.

:T

:rotfl:

I think if you based your whole future security on interst rates staying below 5%, you took a mighty big risk. Going back some time mine went up to 14%.

beecher

MACDONALDO67 wrote: »

Thanks for info. We are not in the !!!! yet but if interest rates go up to 7,8,9%+ then we will be.

Don't fancy renting a room out so rebudget and sell a few things is an immediate option.

As for the Wannabee site I'll keep that one up my sleave... along with the site address for Shelter as well.

Do you mean if base rates went up to 7/8/9 or the SVR you're paying? Because if you're hoping SVRs don't go up to that sort of level I think you're in for a shock - they were 7% only a few months ago. I think they'll be higher than that at some point in 2010, though no-one can tell for sure. They can't go much lower, but can go a lot higher!

Plenty of people who bought at the peak will be in the same position - that's the problem with a pyramid scheme I'm afraid.

MACDONALDO67

maninthestreet wrote: »

Why would repossession be 'surefire'? 4.69% isn't that bad an interest rate.
How high would interests have to go before you would find it impossible
to pay the mortgage? The best suggestion would be to make over-payments now whilst you are able to.

SVR OK at the moment. I am thinking of the bad old days in the early 1990's.

7,8,9% and the alarm bells will definately be ringing. Above that and game over.

What a mess !

paulfaz

Look at selling now and buy something you can afford. Unless you can find the money to reduce your LTV you are at the mercy of your current lender's SVR. At least you have noticed now that this is going to be a major problem in the future - there's no doubt that SVR will rise.