Negative Equity Property & Struggling to Manage

epz_2

it would be a really painful decision but as i see it you are given you are paying £300 a month for to hang on, hope house prices go up so you and brake even.

now say you rolled that 20k into your other morgage as about 5.5% and keep paying £300 a month, you will have paid this off in about 6 years, granted its a kick in the teeth but you live you learn.

now given the rate rises and further predicted ones, and the saturation of the local market etc you will have to beilve house prices will go up over 10% in this time.

best case senario you slog your guts out till the market picks up and break even.

now think about the risks, interest rates are going up and with negative equity you may never get a great deal on a remorgage. if your tenant decides to leave you will likely lose 1 months rent, possibly more if they have trashed the place etc and have to pay the council tax ect as well. that kind of extra expence would only take a few months to really take its toll on your finances as well as likely your health.

its debatable how much further the market can rise with rising interest rates, a growing number of similar generic houses and dropping rental rates and if your rent covered a repayment morgage payments then i might risk it but you are in a much more vunerable possition and the risk vastly outweighs anyy potential gain.

franky i would sell, tack the hit be pretty cheesed off and know the next few years that whatever happens i wasnt likely to get repossed (on both homes) and made homeless.

A_Fool_&_His_Borrowed_Mon

Krish wrote:

I bought a brand new flat built by UK's renowned builder two and half years before. I even recieved 5% gifted deposit from the builder. Anyhow the value of the property fell down drastically, and because of work related transfer, I had now let it out with the consent of my lender, and move somewhere else. Anyhow the rental income doesnt even cover 70% of my interest on it. And I could not sell it off because I will burn my fingers by loosing around £25,000. Its due to remortgage in couple of months now, I am planning to do get a Buy to let mortage at the lowest possible interest so that I can minimise my monthly loss(currently around £300/ per month). But again because of the dip in the property value, I have to pumpin more money to get a 85% mortgage on the value of the property.:eek: I dont have anymore money to pumpin.
I think it is only our "Guru" Martin :money: can help me in this situation! Please help!

This is the Best thing to do:

Sell the place NOW at whatever it will go for.

In short; Take a hit now or take a bigger hit later as you chase the market down.

When Digging a hole, best to stop digging it deeper for yourself & climb out of it.

propertydealer

without going over and repeating what everyone has said on here already, i would try and speak to some of the companies offering financial help, or advise on how to starve off the repo guys. i'm sure you could go on singingpig.co.uk and sell your flat to one of the many investors there but they would be taking advantage of your situation and you would end up alot worse that 20k. best advise i can give, contact 4-5 companies tomorrow and see what the general consensus is, never know one might give you options you might never have thought about.

silvercar

I think its important to find out if this fall is a trend in your area or just the effect of new builds being overpriced and there being a re-adjustment. WIth a large amount of new builds, supply is bound to exceed demand in the short term and this will have the effect of a drop in value. If this is not a trend for the area then you may be able to sit it out. So I would say check if other homes in the area have also faced a drop in price.

Woby_Tide

ianian99 wrote:

Rollon the big crash thats what i say.

I wish something big would "rollon" you.

People make mistakes or life deals them something unexpected like a job move. Theres no reason to be so unconstructive at someones misfortune. Laugh in private if you want, but just remember that you could get stung one day too.

HankMcSpank

Woby_Tide wrote:

I wish something big would "rollon" you.

People make mistakes or life deals them something unexpected like a job move. Theres no reason to be so unconstructive at someones misfortune. Laugh in private if you want, but just remember that you could get stung one day too.

Don't get misfortune muddled up with stupidity. The OP overpaid (the 5% cashback should have been the big warning), he didn't have the foresight to take a long term low rate fix. He didn't have a big enough cushion for when things like 'life' happen (ie he never saved a big enough deposit *before* buying). He never thought of checking how much rent the place would raise or how saturated the market was before signing on the line. But hey at least he got on the property ladder and could hold his head up high amongst peers.:T ....not to do so would have meant social exclusion in present day UK society.

silvercar

if someone removed all the unconstructive posts in this thread, there would be some decent advice to help OP.

Doozergirl

propertydealer wrote:

without going over and repeating what everyone has said on here already, i would try and speak to some of the companies offering financial help, or advise on how to starve off the repo guys. i'm sure you could go on singingpig.co.uk and sell your flat to one of the many investors there but they would be taking advantage of your situation and you would end up alot worse that 20k. best advise i can give, contact 4-5 companies tomorrow and see what the general consensus is, never know one might give you options you might never have thought about.

You need to remove the blatant advertising from your signature!

HankMcSpank

silvercar wrote:

if someone removed all the unconstructive posts in this thread, there would be some decent advice to help OP.

Why not consider what you call unconstructive *as* advice ...to those yet to buy a property..

bazzzz

tara747 wrote:

This is pure comedy.

:rotfl:

Irony. Doh!