Urgent help needed

patman99

OP, has your partner actually had valuations from estate agents on his property yet?, if not, then any rumours about the value being affected by repossessions of other properties are purely that, just a rumuor.

Also, you haven't said if you have a property you are/have selling/sold.

ERICS_MUM

You say that the current place doesn't suit your lifestyles, have you thought if you could change your lifestyles to match your current home ? It really would be the sensible and safe option, and might allow you to save up a bit towards a future new home.

theartfullodger

Assuming the owner is, as outlined above, some £45k+ down with negative equity I rather bluntly suggest they start bankruptcy proceedings, end up with a clean sheet & start again...

His mortgage has a remaining £155,000 to pay (purchase price appox £162,000 in 2006). We have sought advice on selling and have been informed that due to a number of county court judgements that have happened in the building, the sales prices have plummeted to around £110,000.

Whatever "cunning plan" you come up with you ain't gonna clear £45k - which could get worse if house prices keep dropping ..

Sorry, but time tobail out & start again>??

Hope it works out better next time..

PasturesNew

Doozergirl wrote: »

I'd look at renting yourselves.

There's probably some bargain red lightbulbs on the grabbit board

GDB2222

The way it works is that the new home from Bovis is nice and shiny right now, but once you move in it will become secondhand and lose a load of value. That's what new homes do. Same as the other one that's now £45k in neg equity. You are just repeating the same ghastly mistake. Ask yourself WHY the flats in the other block have been repo'd.

Annisele

jdhughes57 wrote: »

1. We have filled in an application to switch to an interest only mortgage with our current provided, NRAM. We stated our reasons being that we intend to pay the capital element through future sale of the house and savings (which are currently very limited if I'm honest). Due to us likely needing to keep the property for a number of years until we generate positive equity we applied for a permanent switch. Is this likely to be accepted in the current climate?

I would say almost certainly not. From the lender's perspective, the fact that the flat is in negative equity greatly increases the risk - if it had to repossess tomorrow, it couldn't get its money back. The more you pay off the balance, the lower the lender's risk - so it's not really in the lender's interest to allow you to move to interest only on a permanent basis.

2. THE KILLER QUESTION - would we be insane to go ahead with our house purchase, rent the property out and keep the mortgage on capital repayments? Doing the calculations we would only have £100 each disposable income (after mortgage, loans, food, bills, saving for Xmas etc). Is this a bit too close for comfort?

Yes, I think you'd be absolutely insane - what will you do when interest rates rise? What will you do when you get void periods? When the boiler breaks down? And that's before you get into the 'nightmare tenant from hell scenario.

However, I think that whether or not you'd be insane is somewhat academic, as I can't see a lender agreeing to lend your partner any more money. If you can afford the new place in your sole name then it might be possible (though I'd still say it was an insane plan).

3. We are purchasing our house using the shared equity scheme with Bovis. We intend to go for the 80%/20% option. I have caught glimpse on here of horror stories of shared equity deals - are they really all that bad?

Yes. They do work for some people - but if you've any intention of moving from the new house, ever, I wouldn't touch it with a bargepole.

4. Just wondering if its worth us trying to get an approx 10% discount on the house price as it appears this has proved popular advice on the forums but is it pushing out luck?

Yes, it's pushing your luck, but if you're really determined to buy the place you should definitely try. Developers rather expect you to push your luck; if you don't you could end up paying *well* over the odds.

5. Finally, what sort of 'extras' other than the usual carpet and turf have you bargained for and got in the past?

As above, I'm afraid I don't think that matters.

Given the rest of your circumstances, I also think that a 5% deposit is going to be too small I'm afraid.

I know I've been pretty negative, and I am sorry about that, but I think that your financial situation looks precarious enough as it is for the idea of new debt to be a bad one.

All of the above assumes that you don't have huge salaries - if you do, there's no need for the pessimism; you just need to save more money and you'll be fine.

Yorkie1

Annisele makes really good points.

Also have you actually checked a) that NRAM will provide consent to let (I thought they were a lender that didn't provide it in any circumstances from what others have posted here); and b) whether the apartment main lease permits sub-letting (many don't, which can lead to the lease being terminated).