Help re. negative equity

Irishgal_2

Hi I am new to the forum and am having a few problems I was hoping someone could offer me helpful advice.

Me and my husband bought our first house in Northern Ireland at the very height of the property boom (literally just before it crashed!). We were able to get an interest only mortgage through the bank and did not have to pay a deposit (just a higher lending charge). When we purchased our house the interest rates were at their highest for some years (5.75%) and we felt that they wouldn't go much higher therefore getting an interest only mortage wuld be ok for the first few years then we culd switch to a better repayment mortgage.

Well, true to form the market crashed and interest rates dropped. We were paying lower payments during this time. We were due to renew our mortgage last July, however, our home is worth significantly less than what we paid for it so we thought we could just stay with the current bank on the mortgage we were in, as we are unable to move to another company.

We got a letter from the bank at renewal just saying that our mortgage rate was doubled. This instantly doubled our mortgage, so even though the interest rate was 0.5% our mortgage was nearly £700. This is just about manageable now, however as the interests rates go up we will be paying significantly more than we have ever paid in our mortgage, certainly more than we can afford!! We both earn less than £20k a year each so paying over a thousand pounds for a mortgage will just break us. We could barely afford the mortgage when we took it out - now it is doubled we definitely can't afford it.

I know the Interest Rate is still low but it will go up again and soon I'm sure. I just don't know where to turn. The house we are in as a small ex-council house. We paid £175k for it and it wouldn't even be worth £100k now (literally).

We just don't know what to do. Is it worth getting ourselves into extreme debt on this house? what would you do. Please offer some advice please!!!

Dave_the_Ginger_Cat

Sorry to hear you're having a tough time right now.

To offer some advice, a few more details would be helpful

What is your current mortgage balance, what rate is your mortgage, are you now on a repayment mortgage, has your income changed and is it likely to change?

I know this might feel a little intrusive, but all of this is anonymous, and it will help us comment.

GlynD

Irishgirl I still say talk to your current provider and ask for a fixed rate or tracker on an endowment mortgage.

Get yourself down to Ulster Bank or whoever you're with and get them told.

beecher2

GlynD wrote: »

Irishgirl I still say talk to your current provider and ask for a fixed rate or tracker on an endowment mortgage.

Get yourself down to Ulster Bank or whoever you're with and get them told.

I don't think the OP is in a position to 'get them told'. The lender is under no obligation to offer a fixed rate or tracker, and I can't see them doing so with such a high level of negative equity, and I can't see the OP being able to afford a repayment mortgage given the figures.

I'm not sure I have any practical advice, rather than overpay - can you take in a lodger to make a difference? Up your income in some way?

GlynD

We don't do lodgers in Norn Irn mate. We get people told. OP needs to go to her lender and see what they can offer. As everyone who bought during the NI boom is in the same fix there will be a contingency plan.

beecher2

GlynD wrote: »

We don't do lodgers in Norn Irn mate. We get people told. OP needs to go to her lender and see what they can offer. As everyone who bought during the NI boom is in the same fix there will be a contingency plan.

Not sure if this is your idea of a joke, but the OP has a serious problem and isnt' in any position to demand anything. A lodger would help with the problem of being unable to afford the capital repayments.

GlynD

beecher2 wrote: »

Not sure if this is your idea of a joke, but the OP has a serious problem and isnt' in any position to demand anything. A lodger would help with the problem of being unable to afford the capital repayments.

Not sure where your sense of humour has gone but by now you should have realised I'm also a Northern Ireland user and am familiar with the problem OP has. That's why I'm offering sound advice. The only advice anyone can give when she has negative equity and can't find a new lender.

Do we understand each other?

beecher2

GlynD wrote: »

Not sure where your sense of humour has gone but by now you should have realised I'm also a Northern Ireland user and am familiar with the problem OP has. That's why I'm offering sound advice. The only advice anyone can give when she has negative equity and can't find a new lender.

Do we understand each other?

You're aggressive, rather than amusing. Yours is not the only advice available - the OP can also try to decrease her spending, and increase her household income. Simply getting a new deal from her present lender in no way makes the problem go away.

GlynD

beecher2 wrote: »

You're aggressive, rather than amusing. Yours is not the only advice available - the OP can also try to decrease her spending, and increase her household income. Simply getting a new deal from her present lender in no way makes the problem go away.

Excuse me. Do you mind taking your bickering somewhere else. OP will not be pleased to see your attitude on her thread. Neither am I for that matter. Address the subject in hand or go elsewhere and find someone to fight with. For my part I will not be responding to you again. One more personal attack and I will report you to the admin team.

I hope you you understand that.

beecher2

How bizarre. I am very pleased to hear that you won't respond to my posts again - thanks.

Former_MSE_Andrea

Hi

To help the OP could you calm down and, if you don't like seeing each others' posts put each other on ignore please.

Thank you!

Andrea