Negative equity, NRAM advice please!!

facingmyproblems

Hi

I have a 2 bed flat and a husband and now 2 kids and we are running out of room. We owe £140k on a mortgage which is interest only, can't afford to go onto repayment at the moment, flat is probably worth £110k. We are with NRAM. I have been looking on internet for best options for our situation but everything ive read says either stay put or pay more off mortgage. We can't rent it out even if NRAM would allow this (not sure if they would) as flat would need to be double glazed and heating fixed before its in a rentable state. Does anyone know if I could move my mortgage to another lender to include the debt, wierdly I could get a bigger place for about £120k. part of me wants to give up the flat and rent, has anyone done this??? any help would be appreciated, thank you

Soot2006

Not possible in 2012

DannyboyMidlands

If it was me I'd be tempted to let the kids share a room for 4 years. Once you own the place outright it'll be easy to do whatever you want.

holly_hobby

Your new mortgage would be based on % of the agreed sale price, ie 95% (or whatever you qualified for) of 120k.

Its unclear if this was a Together Mge - whereby upto 95% of the borrowings were secured as a traditional mge, and anything in excess up to 125%, was on an unsecured basis (albeit at the same rate as the mge). The idea was on redmeption if the mortgagor was unable to refeem the unsecured element, it could be left with NR, with rates loaded to those akin to personal loan rates (which is in essence what the borrowings are).

If thats the case, your actual MGE may not be in neg equity, and you may be able to move (if you have a deposit), whilst leaving the unsecured element with NR - however, you must consider that the repayments will be classed as a liability which will be assessed as part of the status and affordability checks for any new mge.

Speak to them, to establish what the split is .. then take it from there.

Hope this helps

Holly