Negative Equity

sparkles28

Hi

Wondered if anybody can help please?

We currently own a property but we are in negative equity, for 3 years we were on interest only mortgage, we have now started repayments on the mortgage.

We are looking at relocating to a different area where property prices are cheaper, but still communable to work.

How would this work as the property we are looking at will be cheaper than the currently proprty maybe even cheaper than the banks valuation of the current property.

How much deposit etc would we need to be able to move,
Is there anyway of taking a loan for the difference and adding to the mortgage, or anything like that so we could move?

Thanks

Thrugelmir

Suggest you speak to your current lender to see if they can offer you any options.

In the meantime overpay your mortgage by as much as you afford.

Do you have the funds to pay for the cost of moving property?

Jimbo1976

Some lenders are surprisingly accomodating to those moving with negative equity. They realise that often people need to move for their job and if they can't move they lose their job and struggle to pay the mortgage.

As the wise Thrugelmir suggests the best thing to do is to speak to your existing lender to see what they will offer. Whilst you would expect them to be delighted if you find a cheaper property, this may cause you problems as essentially it makes your loan to value worse eg a £120,000 mortgage on a property worth £100,000 is 120% LTV. if you moved to an £80,000 property the loan to value becomes 150% and most lenders would flatly refuse.