We want to pick your brains

fooman

well i have my OR interview tomorrow and we are about 30k in neg equity with 18 years left on our mortage and i am going to try and keep the house rather than loose 7 years of mortgage payments

peachyprice

stintond wrote: »

well its just that , with my last house I was paying over 1000 a month on the mortgage and I had 23 years to go of this , now ,given that it is now valued at 80000 , I am glad to have walked away from it.
Imagine that once I get discharged I went back and bought a similar house for 80000. If I then go back to paying 1000 a month that house could be paid off altogether in about 8 or nine years.
By contrast had I stayed in my old house , after 8 years of paying 1000 a month I would be looking at maybe breaking even at that point , so , therefore , in 8 years time I would then have to pay the rest of the mortgage off for the next 14 years , whereas now I could be mrtgage free at that time and still be living in the same or similar valued house.

But it's going to be a fair few year before you can get a mortgage, by which time prices may have gone up, and you'll be paying silly % interest for being high risk, even moreso for having bankruptcy AND repo on your credit file. In the meantime you're paying someone elses mortgage while you could have been reducing your own.

stintond

fooman wrote: »

well i have my OR interview tomorrow and we are about 30k in neg equity with 18 years left on our mortage and i am going to try and keep the house rather than loose 7 years of mortgage payments

To be frank , if you are in neg equity then you already lost those payments by whatever means whether it be that your house went down in value or whether you secured other loans on it. I appreciate it is a bitter pill to swallow but we have to face facts and that is a neg equity property , by defintion , has no value whatsoever.However 30 k neg equtity may not be so bad if the houses start going up , but you are in effect taking a gamble on this fact , they could drop another 10%.
How much neg equity would you have then?

fooman

you have only got negative equity if you sell it. At least you don't lose money like renting.


like shares to have not lost anything until you sell them

stintond

I will save for six years possibly , after that my name wilb be off the repossesion register and the bankruptcy will have cleared , so we should be able to get a mortgage then , if we havent already. At the end of the day we cant predict all the factors which will influence the prices.In my case I m only hoping to buy a cheap terraced house with no fron garden , the bottom of the market.

fooman

have you worked out how much Rent x 72 payments is ?


Think you might find its nearly as much as most negative equity

peachyprice

Sorry, but I think you are looking at negative equity from the completely wrong angle.

It isn't real, it isn't a debt, it won't cost you any more than when you bought your house. Your house is still worth to you the same as it was the day you bought it, what other people/estate agents/internet price sites, is irrelevant. Your mortgage will still be paid off at the same time as it was when the house was worth more.

Not everyone in negative equity has a huge unaffordable mortgage.

peachyprice

stintond wrote: »

I will save for six years possibly , after that my name wilb be off the repossesion register and the bankruptcy will have cleared , so we should be able to get a mortgage then , if we havent already. At the end of the day we cant predict all the factors which will influence the prices.In my case I m only hoping to buy a cheap terraced house with no fron garden , the bottom of the market.

You will still have to declare your BR on the mortgage application.

stintond

If you were renting now withyour names on the repossession register and someone offered you a mortgage with good rates , but then asked for 48000 arrangement fee , would you consider it a price worth paying if this was the only way they would give you the loan?
I doubt it but this is the same situation you have when you carry neg equity through bankruptcy.You pay a big price for the security of staying on the property ladder in uncertain times, It's good to stay on the property ladder but is it worth 48000 or 30000.........

peachyprice

Please explain how it's costing you £48k, I'm obviously missing something fundamental here.

It doesn't cost you anything unless you want to sell your house.

You're not adding £48k to your mortgage.

If prices never increase and you remain in negative equity for the next 20 years your shortfall would still be covered by your bankruptcy.

Where is the risk, and where's it costing you £48k