Advice needed regarding negative equity please??

kayle_m06

Hiya everyone.
Im really stressed and worried about something and was wondering if anyone could offer their expertise or advice?
To a cut a long story short. Me and my partner are going through a tough time with money and personal problems. We are paying the mortgage fine at the moment. But just don't know how much longer we can stay together. The problem we have is 3 year ago we got 100% mortgage on a 5 year fixed rate. Needless to say we are in negative equity now, approx £8000 - £10000. And if we sell the house, we will be going back to parents NOT buying another house. Where would we stand with the negative equity because we have no ways or means of finding the money to pay the negative equity off? Would the mortgage company (RBS) let us pay the negative equity over a year or two (or 3). Im really worried about this on top of the worry of losing my relationship and just everything :sad:
Thanks to anyone who knows anything about this.!!!

Richard_Webster

In order to pass a good title to the buyer free of your mortgage you have to pay it off so you will have to find the £8-10K.

The only way a lender will ever agree to converting a secured mortgage loan into an unsecured one for the shortfall is if they think that they are likely to be worse off if you hand the keys to them and they sell in a few months time as a repo. You will have to try to persuade them that is the case. Such persuasion may or may not work. Otherwise you are stuck unless you are prepared to get a bad credit record by letting them repossess - they will still pursue for any shortfall if they can.

kayle_m06

Ok thankyou for that. So basically they can refuse to let me sell it and instead reposess the house. It just seems such a shame to have the house repossessed because its not like its as if we havnt been paying the mortgage. Although that is what it may come to as the OH is now out of work, and neither of us can afford it o our own if we do split. So if they refused to let us sell up, I would just stop paying the mortgage and they would reposess it.??

Radiantsoul

kayle_m06 wrote: »

So if they refused to let us sell up, I would just stop paying the mortgage and they would reposess it.??

Pretty much. You need to try and pursuade them though as this would be a lose-lose outcome.

BitterAndTwisted

How many bedrooms does this property have? If one of you moves out and you can get a lodger in perhaps the mortgage could be affordable and you won't have to lose the house

hazyjo

If you do manage to sell the house, can you not take out a loan each of around £4-5k (if it sells for what you expect)? Know you said you're having a tough time moneywise, but if you're both going back to stay with parents, with (presumably) less outgoings and no mortgage...

Really not worth having a whopping great black mark next to your name by getting your house repossessed for the sake of a few grand.

I was in a similar position back in 1994 - recession, negative equity, about £7k debt between us (seemed like a lot more money back then!). Thankfully managed to scrape half of it together, but tough times, I know.

Jx

80schild

If you break up and only one of you is living at the house, you could maybe go down the assisted sale route or government's mortgage rescue scheme-I think you may need to prove that you would not be able to make the mortgage repayments on your own.