Negative equity

FCRangers

Basically my girlfirend is trying to sell her house who she had with her ex. Northern Rock won't let her take on the mortgage on her own.
Looks like if it does sell it will go into negative equity.

What actually happens?
Do you have to take a loan out to repay the outstanding?
What happens if you can't get a loan?

Comyface

Yes, you have to pay the outstanding yourself (by getting a loan if need be). Mortgage lenders can sometimes offer you a loan with the same terms as the mortgage, these have a name which has escaped me for the moment.

My brother was in a similar position in the 90's, and Halifax let them carry on paying the same monthly payments that they were paying to the mortgage to this different loan (and left it attached to their endowment so there was some security) until the debt was paid off.

I'm racking my brains to remember what it was called, will post again if I remember (or maybe someone else could let me know, it's now driving me mad!)

Edit - Deed of Assignment! Phew, was on the tip of my tongue for ages!

blueberrypie

FCRangers wrote: »

Basically my girlfirend is trying to sell her house who she had with her ex. Northern Rock won't let her take on the mortgage on her own.
Looks like if it does sell it will go into negative equity.

What actually happens?
Do you have to take a loan out to repay the outstanding?
What happens if you can't get a loan?

You have to pay what's outstanding, one way or another. The lender has a charge on your property, and they will not release that charge until the mortgage is paid in full (and your buyer would need this done in order for their own mortgage to go through).