Neg equity but need to sell, what options?

arwenamen

Hi
Hoping someone might have some advice on this, we are in a situation at the min where we need to move from where we are living but our house is currently in neg equity, mortgage is £117000 compared to house value of around £100000, as well as the fact that houses in the area simply are not selling.

Our plan is to move to another area and just rent, but what I want to find out is to cover the excess if we manage to sell the house what are our options?

Im guessing we could be looking at £30000 all in with legal fees and with assuming that we wouldnt get £100000 for the house.

Are lenders willing to lend this kind of amount to someone who would no longer have collateral? as well as the fact we are self employed which im assuming makes us a bigger risk.

Would it just be an option of trying to get a personal loan? or do you think our existing mtg company may help organise something with us to cover shortfall?

Thanks

R

Gorgeous_George

A personal loan is likely to be the only option if you decide to sell. Lenders are more concerned about affordability than the purpose of the loan.

£30K may be a high estimate. One option would be to use the social lending website Zopa and get two loans of £15K (Zopas loans are limited to £15K).

Zopa only lend to borrowers with good credit ratings but you could register and try a listing. In listings, you explain what you want the money for and lenders make offers - a bit like eBay. Rates can be achieved that are lower than high street loans and if you use the Tell a Friend scheme, some Zopa members (me included) will offer to return £40 of their £50 referral fee once the loan is withdrawn. With both of you applying, that'd be £80.

GG