negative equity and unable to sell flat

sallycinnamon1980_2

Hello,

I was wondering if anyone could help me. I currently have a mortgage with the HSBC and I have been to see them.....they were no help whatsoever!


Anyway, I live with my fiance in a flat (his) and my flat is empty - I am not able to rent it out as I don't have enough equity in it to do so.

It had been on the market for nearly two years and over those two years I have dropped the price by 15k. It is up for 65k. I am currently in negative equity - well I think I am. I have 68k outstanding on the mortgage.

Now we have a little girl and money is very tight - paying 2 mortgages of over £1000 pdm combined. I also have to pay 1/2 council tax on the property now.

I have had a small number of viewings to the flat but no interest.

The flat needs some updating (maybe new heating as I have immersion) and some basic decorating. Which has been taken into account with the price.

Can anyone help me as I am literally having to beg, steal and borrow to survive.

I've thought about handing the keys back but I don't know what it involves. Plus I don't think I could do that.

Any suggestions would be a great help as I can't sleep or eat with worry.

Thanks,

Sarah

goldbyron

Have you explored taking the property to auction?

Fire_Fox

So HSBC will not give you permission to let? Have you asked to go onto an interest-only mortgage? Can you move into your flat and let out your fiance's flat? Have you asked your estate agent what they suggest you can do to get more interest? Have you considered rounding up friends and family and redecorating on the cheap? Most people have several tins of paint in their shed or garage.

If you hand the keys back (voluntary repossession) the bank will sell the flat for whatever they can get and then chase you for the shortfall; they will also charge you thousands for their time and effort in selling the place.

sallycinnamon1980_2

No, I haven't but that sounds like a good idea. I wonder if it goes for £40k that I'd have to pay off the difference - £28k somehow as the mortgage is against the value of the property. I will email my estate agent. Thanks for that.
x

sallycinnamon1980_2

Fire_Fox wrote: »

So HSBC will not give you permission to let? Have you asked to go onto an interest-only mortgage? Can you move into your flat and let out your fiance's flat? Have you asked your estate agent what they suggest you can do to get more interest? Have you considered rounding up friends and family and redecorating on the cheap? Most people have several tins of paint in their shed or garage.

If you hand the keys back (voluntary repossession) the bank will sell the flat for whatever they can get and then chase you for the shortfall; they will also charge you thousands for their time and effort in selling the place.

I originally had an interest only mortgage and TBH the difference was only £100 pcm. I'd rather pay off capital. My flat is in an entirely different county and unfortunately nowhere near our place of work. We've started redecorating and we're doing that as we go along - family have been very supportive with help.

I'm VERY reluctant to voluntary reposess. I had already rented flat out and got into trouble as mortgage company didn't know.

I think a lot of people are put off by the old fashioned fireplace (dead 70's), plastic cladding on bathroom - I have no idea what os under there as it was like that when I moved in, and the kitchen needs slightly updating. Guess there are people worse off!

thanks for advice!

sarah_elton

sallycinnamon1980 wrote: »

No, I haven't but that sounds like a good idea. I wonder if it goes for £40k that I'd have to pay off the difference - £28k somehow as the mortgage is against the value of the property. I will email my estate agent. Thanks for that.
x

You will have to pay the difference. You owe HSBC £68k, so on completion day they want to be handed £68k. That will come from the proceeds of sale, and the remainder from you.

I sold in negative equity earlier in the year and I had to have the funds to cover the shortfall in my solicitor's account ahead of completion day.

sallycinnamon1980_2

I thought that I would. Thanks for your advice. I just feel like I can't do anything.

x

savemoney

If it was me I would decorate and it can done quite cheaply, with cheap paintable wallpaper and emulsion and gloss paint for doors/windows/skirting etc, hopefully it might make it more attractable

Sweetcaz_2

sallycinnamon1980 wrote: »

Hello,



Anyway, I live with my fiance in a flat (his) and my flat is empty - I am not able to rent it out as I don't have enough equity in it to do so.



Sarah

I do not see that negative equity prevents you renting it out?

Ultimately though it is in HSBCs interest for them to help you so I would try speaking to them again. You would be alot better working with them for both your sakes. If necessary put everything in writing to them.

You will not be the last person to be in this situation and handing the keys back is the worst thing you could do and should be a last resort.

Good luck

Fire_Fox

sallycinnamon1980 wrote: »

I originally had an interest only mortgage and TBH the difference was only £100 pcm. I'd rather pay off capital. My flat is in an entirely different county and unfortunately nowhere near our place of work. We've started redecorating and we're doing that as we go along - family have been very supportive with help.

I'm VERY reluctant to voluntary reposess. I had already rented flat out and got into trouble as mortgage company didn't know.

I think a lot of people are put off by the old fashioned fireplace (dead 70's), plastic cladding on bathroom - I have no idea what os under there as it was like that when I moved in, and the kitchen needs slightly updating. Guess there are people worse off!

thanks for advice!

The flat is obviously overpriced for it's current condition: the longer you prevaricate over redecorating the more it is costing you in a small fortune in mortgage interest and service charges. Either round up some helpers or take a week off work and get it sorted ASAP not 'as you go along'. Paying off the capital makes no sense if you are only paying off £1200 a year - how much are you paying out on the flat to make that much profit??

The £100 a month would pay for paint, tiles, rip out/ board over the fireplace in some way. Most of this could be done by you and/ or a handy friend. I know it's tough to think of doing up something that you have physically and mentally moved out of, but it's that or end up tens of thousands of pounds in debt if you end up repossessed.

If you post up the Rightmove link and we can comment on the decor and what you might do cheaply to make the flat more saleable. Bear in mind there are far more flats on the market than buyers, so your competition will probably be immaculate new builds! FTBs don't want a fixer-upper flat as you don't have enough space to live as you redecorate.