Barratts dream start help desperately needed - we may be forced to sell our home

silvercar

joolsyp wrote: »

What would the lender gain by repossessing if there is significant negative equity? In my case the first lender/mortgage company has to be paid off first which means the second lender would stand to lose way more through a repossession than coming to an agreement with the owner (either a lump sum or extension to the terms of the loan).

Some lenders are capable of seeing this, others just follow their rules. Not all are capable of joined up thinking.

hildosaver

It is a crap situation to be in alright - I have been there myself and was at one point (4 years ago) around £30,000 in negative equity. The only three options available to you really are to

1: accept you will be living in that house (which you originally bought to be a home after all remember) for the next 5-10 years until the market recovers and overpay your mortgage in the meantime.

2: Save a deposit on the new house you want, get 'permission to let' on your current home and rent it out for 5-10 years and then sell.

3: Go bankrupt.

Both 1 and 2 require you to overpay and/or save a significant amount of your income for a prolonged period - difficult yes but not impossible and probably better options than number 3.

I have been overpaying like crazy and now have almost 80% equity in my home but it has been really tough and we have sacrificed a lot but I know it will be worth it in the end.

Chz_uk

Hi, I'm looking for some advice on a plan I have to resolve my similar situation please - any comments would be gratefully received.

I bought a Barratt home in 2009 with their Head Start scheme where they had a 15% equity in the property. The sale price was £116,995, Barratts stake was £17,549.25, my deposit was £5849.75 (5%). As other posters have mentioned, the second charge now resides with Rose Shared Equity.

My property is now worth less than the purchase price, I recently had it valued at £90 - £95k and one of the same type sold on the street last week for £92,500. I have had a repayment mortgage from the start and have about £86k remaining on it.

I need to repay the 15% by 2019 however I plan to move during the next year. I took Voluntary redundancy last year so had a pay-out that £20k of which was going to be used for a new deposit on my next house.

Anyway, thats the background. I was considering whether it would be better to try to get the second charge removed early using my new deposit money? As the property is now worth about £95k max then 15% is £14,250. If I can negotiate with Rose Shared Equity to say £10k to remove the charge would that be worthwhile looking at my figures? I'd be spending £10k of my saved money but I wouldnt have to pay 15% of the value to Rose when I sell the property next year. Say I sell it for £95k, after I've paid the mortgage I'll get £10k back (obviously minus all the fees).

Sorry if that went on a bit. Does this make sense? Would it be recommended to get rid of the second charge before selling?

Also, some of the early posters in this thread will have gone passed their repayment dates by now - does anyone have any experience of that which they could share?

Thanks for all your help in advance.

Tree85

We were in a similar situation we bought our house 8 years ago for 132 and when we looked at selling 4 years ago it was only worth 100!!!! When we spoke to barratts about the shortfall they offered an interest free loan over 3 years to repay the deficit. At the end of the day there are thousands of people in your situation because barratts over price their houses trust me if you speak to them about your situation and offer to pay so much back a month they'd be more than happy to look at it as at the end of the day they won't be getting it back otherwise!!! We've just sold our property and luckily we have enough equity now to pay them off but now barratts have passed the loan on to some other company and we've got to pay them £180 admin fee!! I'm trying to fight it as we speak!!! Good luck