Negative Equity but wanting to move?

robbo_

Hi all,
This is my 1st post so sorry if it's in the wrong place...
I bought a house in 2007 and now looking to sell. I'm in negative equity by c.£20,000.

I have considerable savings but if I use this to 'overpay' my mortgage to bring it back into the black, then I won't be able to have a deposit for a new place.

My current mortgage deal ends in 2012.

What are my options? Could I rent my current house out to cover my Mortgage payments then use my savings to put down as a deposit for my new property? I may have to do this without consent though (I'm aware of the risks etc).

Will other Mortgage companies even consider me? (My credit score is excellent) Or do I just not declare my other Mortgage on a new application as I'm going to be 'selling' it?

Any help would be appreciated!!

Rob

wymondham

robbo_ wrote: »

I have considerable savings but if I use this to 'overpay' my mortgage to bring it back into the black, then I won't be able to have a deposit for a new place.

I think you've answered your own question.....

brit1234

Sorry don't think you have a chance. Better off paying negative equity off. It will only get worse as prices continue to fall over next year.

opinions4u

robbo_ wrote: »

Hi all,
This is my 1st post so sorry if it's in the wrong place...
I bought a house in 2007 and now looking to sell. I'm in negative equity by c.£20,000.

I have considerable savings but if I use this to 'overpay' my mortgage to bring it back into the black, then I won't be able to have a deposit for a new place.

My current mortgage deal ends in 2012.

What are my options?

Basically, unless you existing lender has some sort of scheme to help, you don't have any.

Could I rent my current house out to cover my Mortgage payments then use my savings to put down as a deposit for my new property? I may have to do this without consent though (I'm aware of the risks etc).

If your lender agrees, then yes.

Will other Mortgage companies even consider me? (My credit score is excellent)

If you've sold the house, paid off the negative equity and got the deposit for the new place, yes.

Or do I just not declare my other Mortgage on a new application as I'm going to be 'selling' it?

Commit mortgage fraud? Probably not a good idea, especially as any new lender might just notice this big debt thing on the credit report.

yelf

some providers did allow negative equity to be ported when moving, but i dont know if they do now

rover25

Hi, Just wondering, do the banks automatically turn you down for a 2nd mortgage even with 20% deposit if you are in large negative equity on 1st house.

Do they not take affordability into account?

Thrugelmir

rover25 wrote: »

Hi, Just wondering, do the banks automatically turn you down for a 2nd mortgage even with 20% deposit if you are in large negative equity on 1st house.

Do they not take affordability into account?

You don't have a 20% deposit. You are merely borrowing the money from your existing property.

Putting money into different pots is illusory. What matters is your net equity/cash position.

You time would be better spent thinking of ways to cut your outgoings and reduce your mortgage quicker. There's no easy answer. Just hard work and committment.

Dick_here

How did you let yourself get 20k negative equity if you were thinking of moving ? You should have been over-repaying every month to prevent it.

rover25

It was not a matter of 'letting' myself get into negative equity.
We bought in Feb 2007 -height of the boom.
We live in NIreland where house prices have decreased by 50% in areas -one of which is mine. The actuality is it has dopped £70,000.
My mortgage does not allow over payments.. Only £1000 per year, which we have paid and £4,000 as a lump sum following our marriage and at the end of our fixed deal rate. We are now on another fixed rate.
The savings we have made would amount to approx 15% of a new house deposit. You can see what we were doing with the money as we were not allowed to overpay.
We do not want to be tied to this house forever,- putting in all our savings would still not clear our negative equity for many, many years, plus we have a number of issues with it that will ultimately lead to negative mental health on my part -neighbours, area etc -If we were able to buy somewhere else, at least we would be able to move from it.

My original question was do the banks take affordability into account for a 2nd mortgage or do they turn you down straight away because of the negative equity on the 1st property?

robbo_

Ok you've kinda stolen my thread here but hey ho!

Thanks for all the info, I called my mortgage provider and they are willing to port my current mortgage onto a new property (at a cost, but I can't complain too much!!) I just have to put my savings onto the Mortgage I currently got to reduce it so I am in effect having a 99.9% Mortgage now.

Again thanks for all the information.

Rob

rover25

Hi, Sorry about hijacking your thread. It just seemed a similar scenario to my own -(only mine is even worse!)
That's great news about them allowing you to port your mortgage. Can I ask did your savings clear off your negative equity and that was why they allowed you to transfer the mortgage onto a new property?