Negative Equity

miss_hh

Hi
Is there anywhere I can go to find out more information concerning selling and negative equity.

My BF has an apartment at negative equity of approx £30,000.
He wants to sell. What are his options?

He was told that he could apply to the bank to ask that they reduce the amount he will owe them. Has anyone heard of schemes like this?

Also, will this affect any future mortgage he applies for? We want to start saving for a place of our own and were also wondering is there an upper age limit for a mortgage? We are both 35.

Thanks for any replies.

Thrugelmir

miss_hh wrote: »

Hi
Is there anywhere I can go to find out more information concerning selling and negative equity.

My BF has an apartment at negative equity of approx £30,000.
He wants to sell. What are his options?

He was told that he could apply to the bank to ask that they reduce the amount he will owe them. Has anyone heard of schemes like this?

Also, will this affect any future mortgage he applies for? We want to start saving for a place of our own and were also wondering is there an upper age limit for a mortgage? We are both 35.

Thanks for any replies.

Most constructive option is to live in the property and repay the debt. Over time the negative equity will disappear.

Many lenders may well accept a lump sum settlement if a property is voluntarily repossessed. Downside is that this will damage your credit rating for some considerable time. So you will end up wasting your money on rent.

miss_hh

He has a lump sum of money that he wants to pay of hte negative equity. We were not aware that this would affect his credit rating.

We were under the impression that the bank would take the apartment back if we paid the negative equity.

We want to move in together, his apartment is only one bedroom and that would not suit us as I have three children.

Have me no other options for giving up this apartment?

Thrugelmir

miss_hh wrote: »

He has a lump sum of money that he wants to pay of hte negative equity. We were not aware that this would affect his credit rating.

We were under the impression that the bank would take the apartment back if we paid the negative equity.

You still owe the mortgage debt. Until such time as the property is sold and the mortgage is cleared he is liable for any shortfall.

BlueAngelCV

miss_hh wrote: »

He has a lump sum of money that he wants to pay of hte negative equity. We were not aware that this would affect his credit rating.

If he sells and then pays of the negative equity it won't effect his credit rating but he can't just pay the equity and leave without selling & leave it to the mortgage company to sort out.

If he has the money to pay the negative equity then what is the problem with selling?

miss_hh

He is not going to just leave it! He has three quarters of negative equity but someone mentioned to him that the banks had some sort of scheme whereby they reduce the neg equity that is owed if you are paying a lump sum??

Thrugelmir

No scheme. A negotiated settlement.

However will affect his credit rating for a number of years. So not a decision to be taken lightly. Should not be viewed as a quick fix get-out. Lenders are too wise to these games.