Negative Equity Options

LittleAcorn_2

Does anyone have any suggestions?

I'll try and keep this short. Bought a flat 7 years ago, paid 20K deposit and 110K on mortgage, I now owe 92K approx! I am desperate to move but 2 bed flats are now selling for 55K - 65K around here.

I don't have access to funds to cover the shortfall. I can't rent it out as rental fees are lower than my mortgage payment & I can't afford to cover that shortfall & rent/buy elsewhere my self.

Although I've a good credit history I don't think I'd get a loan for 30 - 40K.

Feel like I'm trapped with no way out. Does anyone have any ideas of how to cover the negative equity?

opinions4u

1. Lots of saving.

2. Generous parents.

3. Talk to your lender, they may (or may not) have a negative equity scheme if you're moving house, or selling with a shortfall and not buying again.

4. Consider bankruptcy (don't do this without fully investigating the pros and cons).

5. Sit tight and pray, hoping for a recovery in the market, a windfall etc and plan your finances carefully to chip away at the problem.

Best of luck. Whichever you choose won't be easy.

beecher2

If your original mortgage was 90k, are you sure you now owe 92k? Is it interest only with fees added? What was your original plan to pay off the capital?

All you can do is overpay - can you take in a lodger to help?

LittleAcorn_2

My mortgage was for 110K so I've paid off 18K so far, & it's capital & interest mortgage.

Unfortunately a lodger isn't really an option. My parents would help if they could.

Looks like I'm stuck!!!:(

Thrugelmir

50% fall in property value. :eek: ?

LittleAcorn_2

Unfortunately I bought just before investors bought everything else on this new estate. They got their fingers burnt and started renting to anyone and I mean anyone. Now in the situ were buyers don't want to look at the estate due to bad reputation hence 50% fall!

Thrugelmir

Stick it out. Everything moves in cycles.

In the meantime keep paying down your mortgage as fast as you can.

Gorgeous_George

LittleAcorn wrote: »

Bought a flat 7 years ago, paid 20K deposit and 110K on mortgage, I now owe 92K approx!

beecher2 wrote: »

If your original mortgage was 90k, are you sure you now owe 92k? Is it interest only with fees added? What was your original plan to pay off the capital?

Are you a mortgage adviser?

OP, whether or not the market has hit the bottom in your area is the key - and for the answer you will need a crystal ball.

Sell and you realise the loss. Hold on and you risk further losses. It realy is a rock and a hard place situation.

My gut instinct is to hold out but I don't know your area. £30K to £40K is a lot of debt to pay off and maybe the price of your flat cannot fall much more. Just be careful, think it through and be lucky.

GG

beecher2

Gorgeous_George wrote: »

Are you a mortgage adviser?
GG

No, I simply misread the figures as I didn't expect there to be a 50% drop. Sorry about that OP, but my advice remains the same - overpay.

LittleAcorn_2

I'm kinda leaning towards the option of playing the lottery every week and keeping my fingers crossed!!!:cool: