Negative Equity - escaping a house i dont like!?

opinions4u

rentanopinion wrote: »

I dont see how negative equity is higher risk. Surely, its the borrowers ability to meet repayments that determines the risk level here? NE does not result in a borrowers inability to meet repayments, no?

Look at from a lender's point of view.

You repossess a property worth £150k with a £100k debt on it.

You repossess a property worth £100k with a £150k debt on it.

Which one gives them the likelihood of losing a significant sum of money?

rentanopinion

michelle2008 wrote: »

Negative equity is higher risk because part of the debt is unsecured.

ok, i concur. thanks, never thought about that part.

Thrugelmir

[QUOTE=rentanopinion;52633813
I guess i'm not the only person who feels the frustration of being in this position where banks can effectively wash their hands of the situation even though they ratify house values during the mortgage application process. grrr!

[/QUOTE]

Was your choice to buy the property. The bank lends money, it doesn't run a property business. You could have rented instead.

Froggitt

rentanopinion wrote: »

banks can effectively wash their hands of the situation even though they ratify house values during the mortgage application process. grrr!

All theyve done is what you asked them to do, ie lend you some money. You now have to pay them back. Theyre not washing their hands of anything.

rentanopinion wrote: »

I know this will sound stupid, but how comes lenders who value properties during the purchase process can penalise buyers when property values fall?

Theyre not penalising you are they? How? Are they calling in your mortgage?

They didnt force you to take out a mortgage or buy the house. Were you not aware prices of houses go down as well as up.

Theres an interesting idea above.....you rent out your house, and you rent another house that you do like. Thats the only real solution to your problem......youll need to tell your bank, and they will charge you to do so, and youll need to cover the monthly shortfall, and theres insurance as well.......but at least you get to live where you want.