Negative Equity - Moving House

gifster83

My friend managed to move whilst slightly in negative equity, by moving into a new build and they worked out some sort of deal to pay off his old mortgage. Does any one know if this would be an option?

AppleCore

Maybe sell you flat and rent for a while? Not ideal I know but at least you could move somewhere bigger.

gifster83

How would I be able to sell whilst in negative equity?

twirlypinky

I'm in a similar situation, i recently moved in to my boyfriend's one bedroom starter home and it's far too small for the both of us. His mortgage is 97% and he added the fees to it, so nearly 100% really. But the house is now worth less than he paid and we want to move.

We finally agreed that buying a bigger house is out of the question, it'll take us 2 years to save even a 10% deposit, so instead we're saving to be able to pay off the mortgage when the house is sold and then move into rented.

It's sad, but one of those things. I think house prices are too risky these days to gamble on. I'm still really worried that in the time it takes us to save, prices will fall again and we'll be no further forward.


Your other option is renting it out and then renting somewhere bigger for yourselves, lots of hassle there though.

gifster83

I have just been speaking to Tesco about a personal loan to cover the second charge (at a better APR!) and I think this might be an option. It doesn't slave the situation but at least I will be slightly in positive equity!

Any thoughts???

sonastin

If you can get the second charge removed so that you are have some equity, you're probably in a position to sell and move into rented. Unlikely to be able to port the mortgage unless you have enough left over from the sale to give you a decent deposit - again the bank will consider the change in security in the same way as they would consider a 100% (or 99%, 98%, 97% or whatever) mortgage.

You'll need to make sure you can afford both rent and loan repayment too...

gifster83

sonastin wrote: »

If you can get the second charge removed so that you are have some equity, you're probably in a position to sell and move into rented. Unlikely to be able to port the mortgage unless you have enough left over from the sale to give you a decent deposit - again the bank will consider the change in security in the same way as they would consider a 100% (or 99%, 98%, 97% or whatever) mortgage.

You'll need to make sure you can afford both rent and loan repayment too...

Thanks, so even with a portable mortgage and looking for a new house at the same price or less I wouldn't just be able to just shift it across?

PasturesNew

If priced identically, moving from FlatA to HouseB would still incur charges of about £3-5. For HouseB the lender would like to see a good deposit (£10k). So you'd need about £15k sloshing about somewhere to achieve it.

It's best to plan to sit tight for 2-3 years, saving every penny you have and killing the debt/getting a deposit together.

gifster83

Looks like the personal loan is a no go... The settlement figure on the secured loan is £19,000

gifster83

gifster83 wrote: »

Looks like the personal loan is a no go... The settlement figure on the secured loan is £19,000

That puts the outstanding finance at £110,500 on a property worth £92,000 - £100,000