Mortgage advice and negative equity

Tainted_love

Hi, I bought a shared ownership property in 2007 , it is a 50% share on a house valued at the time of £138000. My mortgage is £59000. I am now married and my husband and I wish to get a joint mortgage and buy a house together. How does this work can I transfer my mortgage and add his amount to it or do I have to wipe mine out and start again? He is a first time buyer ,does that mean we would be eligible for a first time buyer mortgage or not because I've already got one?

Also we are in negative equity with a drop of approx 20k. As its shared ownership that's 10k as the profits/losses are shared . Do you have to pay 10k to the bank immediately or do you add it onto your next mortgage?! I'm so confused, any help appreciated .

kingstreet

There are going to be lots of possiblys and maybes in this response.

In the first instance, when you sell a property, your mortgage is repaid, so there's no question if it being transferred to another property.

If you qualify for a new mortgage on a new property with the same lender, you may be able to transfer the rate from the old mortgage, but that's about it.

First issue. Negative equity. You won't be allowed to sell the property if you don't first deal with the negative equity issue with the lender. If unable to repay the excess at completion, they may require you to reach a payment arrangement with them for after the sale is completed.

Some lenders will allow you to add negative equity to the mortgage for the next property, but you will have to put down a deposit first. The idea is, you'll not borrow more than you currently owe and the loan to value will actually fall, as you're buying a bigger, more expensive property.

Find out from your lender what route it uses.

You'll also have to speak to the Housing Association about selling at a loss too. You need its agreement to sell for a particular price and will have to go through the valuation process, at your expense, of course.

In respect of your next mortgage, you'll need a deposit, normally 10% of the purchase price and will apply for a new joint mortgage with your other half. Some lenders will allow you a FTB product as one of you has never owned a property before. TBH the differences in products aren't that great, so you won't lose out much even if you aren't treated as FTBs.

TBH you need to address the negative equity issues, before anything else becomes vaguely relevant.

Thrugelmir

As Kings suggest start with your current mortgage. Overpaying it in order to lift yourselves out of negative equity and into positive territory. Would be the ideal first step.

Tainted_love

Thanks for replies, as my mortgage is 59k as a 50% share ( my deposit was 10k ) what would the house have to sell for to break even? Is it simply 59000 x 2 = 118000 in value or have I missed something?!

kingstreet

No. You are correct.