I have negative equity, but want to move......

game975

Hi!

First post from me, hoping people can give me some advice.

I bought my first house in 2005, and am now in negative equity. In the last 4 years, my salary has improved and I now have a fiance and we want to buy our own house, but as mentioned above, I am in negative equity.

We are looking at buying for around £170k, and can probably just about raise the deposit and costs. But is there a way around carrying my negative equity over with me? Are mortgage companies likely to do that?

I've been told to save and try to pay off my negative equity, but I don't really want to do that and I feel I can get a better house for the money if I buy at this time.

Or does anyone have any other advice?

Thanks!
Matt

Milliewilly

You will have to make up the defecit to the mortgage company when your house is sold so if you can why not pay it off now to make things straightforward?

Have you had an offer on your house / made an offer and had it accepted so you know the exact figures you are dealing with?

As far as I know mortgage companies wont let you port negative equity.

tek-monkey

AFAIK you need to save and pay it off, can't think of another way around it without giving the lender what you owe them.

JQ.

You can't get away from you're negative equity. No matter what you do, it will have to be paid. To move you would have to use your savings to pay off the mortgage defecit when you sell and then use what is left of your savings to purchase a new house. Of course remembering the move will cost you circa £5,000. Is that possible?

surreybased

Hi,

I can understand that as your circumstances have changed you want a house with your partner..could you consider selling, paying off NE and then rent whilst you save? No one can guess the housing market but depending on where you are in the county now might not be the time to buy.

LilacPixie

How much NE are you in?? woud the deposit you can scrape together. Have you re mortgaged an took extra money out of the property of wa the mortgage a high LTV in the first place.

As far as i know there is no way to carry the NE with you as you will still need a minimum 10% deposit on your future house. The key to your problem is in the figures. how much NE, how much depoit do you have?

game975

To be honest, this is all just talk at the moment.

I live in Birmingham, and am currently at the lower end of the market (bought the house for £100k). However, I took out a 100% mortgage with Northern Rock, which seemed a great idea at the time but am now paying the price.

But, this is all guesswork and examples at the moment, say I put my house up for sale and sold it and had £5k negative equity, and I had £15k for a deposit for a £150k house, my question was really is there another way around it, rather than having to save for another year/18 months the £5k to pay off the negative equity.

Thanks for your help!

Milliewilly

Hi
10% deposit isn't going to get you a great mortgage plus like others have said you need about £5K on top for moving costs - EA fees, Solicitor, Stamp duty, removal van etc.

I suppose the only real solution you have is to look for a cheaper house or try to get asking for yours and a chunk off the £150K. Its a difficult situation but its not impossible. Is your Fiance contributing anything? Good luck.