negative equity

bigkerrbear

Hi folks,

i hope this has not been asked before.

With the recent interest rate cut, i was hoping to see the benefits in my mortgage payments. But unfortunately, due to the house prices dropping, i am now in negative equity. I was due to re mortgage in April, but have been told that i will have to stay on my current deal until i am out of negative equity.

Just to let you know, we bought our house for approx 230,000. The house is now worth about 180,000 and we have a mortgage of 200,000. My interest rate on the mortgage is 5.11% and i am with the Alliance and Leicester on a fixed term deal. (due to expire in April)

Is there anything i can do? Or am i snookered until the house market picks up again. I am in no rush to move, but would like to see some benefit in my pocket at the end of the month.

Matt

beecher

Overpay as much as possible. If your house is worth £180,000 you'd only be able to get a mortgage of £162,000 (90% LTV) elsewhere so you have a way to go to be honest. Maybe A&L allow you to have a new deal simply by being out of negative equity though.

Don't bank on the value of your house being worth over £200,000 for quite a while. Try to be prepared for when interest rates start to climb too.

Check what your deal goes onto - is it the SVR or a tracker?

_Andy_

Your only option will be to stay with A&L and see what deals they offer you.

Fliss_M

Double check SVR and Tracker (some A&L customers have been lucky, depends how long ago you took out the deal) , over pay no matter what (unless you have credit cards debts) so when prices and rate go up again, you can get a good deal quicker and try giving A&L a call if it is SVR to see if they can do a neg equ deal for current customers. (I am doubtful, but no harm in asking)

maninthestreet

A+L SVR seems to be 4.99% at the moment, If my understanding of what's on their website is correct. So you'll save a little money each month from April onwards. If they pass on today's 0.5% BOE base rate cut, you'll save even more.