Moving home with negative equity.

RobHolyhead

Hi all,

Me and my wife currently own a 2 bed mid terrace with no garden with £67k left on the mortgage, our house is valued at £55k. There is a house for sale further up my road (a 3 bed semi with a huge garden) for sale at £85k.

Taking in to consideration our negative equity and combined wages enabling us to lend £137k.....

Is there ANY way the move is possible?

We would even consider keeping our current house and renting it out if this is a possibility!

We are DESPERATE for a move so our daughter can have a garden to play in and so we have somewhere to relax in the summer!

Thanks

Rob

Thrugelmir

Keep paying down your debts. If you want that dream house. Then economise wherever you can. To speed events forwards.

RobHolyhead

Thanks for the advice but that's not what I asked.

We don't have time to wait until our current house is no longer in negative equity, if we wait for that our daughter will probably have moved out!

Dave_Ham

Hi,

Is this an NRAM mortgage?

If you could rent out your property, do you have savings to act as a deposit or someone willing to gift you it?

RobHolyhead

Hi,

No its a Halifax stranded mortgage. At the moment we have no savings but my wife has just started a job so have almost doubled the household income.

mrginge

Thrugelmir wrote: »

Keep paying down your debts. If you want that dream house. Then economise wherever you can. To speed events forwards.

It might not be what you asked, but given that you have negative equity and zero deposit it is exactly the right advice.

Dave_Ham

Cheers,

Ok, this is just an opinion and do not constitute as advice as I do not know enough about your detailed situation.

Consider getting yourself on a fixed Halifax deal and get consent to let. I would assume rent would pay the mortgage (although potentially you can increase term if on repayment)

Consider an unsecured loan to achieve the deposit on the new purchase. Many lenders will not consider the first mortgage as part of affordability and therefore it will be based upon your new affordability purchase (+ unsecured loan)

It would not need to be huge as potentially you could still achieve this all with 10% (limited lenders) on the new place.

This is of course just for consideration and there are many reasons why a loan should not be achieved for a deposit and is not technically good advice.

Subject to your individual situation of course

ValHaller

RobHolyhead wrote: »

Thanks for the advice but that's not what I asked.

We don't have time to wait until our current house is no longer in negative equity, if we wait for that our daughter will probably have moved out!

It is a way of addressing your problem. Don't knock it as a way forward to get your daughter a garden to play in

If you are good for a mortgage of £137k against the present mortgage of £67k, that is borrowing of an extra £70k, which over 20 years would be £468/month. So you could clear your negative equity in 25 months and have another deposit of £10k in under 4 years. Given the fact that the economy is heading towards an election, you may find that your negative equity eases anyway and you could have the problem licked in 3 years - or quicker if you put more away

Although it is a long time, unless as DaveHam asks, you have a source of another deposit, I fear that renting out and borrowing for another property will leave you financially exposed to great debt issues for the future

RobHolyhead

mrginge wrote: »

It might not be what you asked, but given that you have negative equity and zero deposit it is exactly the right advice.

I am aware of my situation thanks very much, all I'm asking is if there is a way to carry my negative equity with me, a simple yes or no with some reasoning is what I'm after. I have lived with the negative equity for the past 5 years.

RobHolyhead

Dave_Ham wrote: »

Cheers,

Ok, this is just an opinion and do not constitute as advice as I do not know enough about your detailed situation.

Consider getting yourself on a fixed Halifax deal and get consent to let. I would assume rent would pay the mortgage (although potentially you can increase term if on repayment)

Consider an unsecured loan to achieve the deposit on the new purchase. Many lenders will not consider the first mortgage as part of affordability and therefore it will be based upon your new affordability purchase (+ unsecured loan)

It would not need to be huge as potentially you could still achieve this all with 10% (limited lenders) on the new place.

This is of course just for consideration and there are many reasons why a loan should not be achieved for a deposit and is not technically good advice.

Subject to your individual situation of course

As in an old style bridging loan? wasn't this popular some time ago ?

Dave_Ham

Not necessarily, I have just seen clients solve this by taking an unsecured personal loan when in negative equity

As I said, totally against good advice but if affordability has significantly increased then either borrow it, or as above says save, save, save for the deposit and then get consent to let..