Negative Equity problems

getmore4less · 10 December 2014 at 1:56PM

What rate does the unsecured part go to if you move the mortgage away from NRAM?
(by remortgage or paying it off)

cuurently you have 1 option pay down debt.

I would consider getting the secured part down to sale proceeds level or wait for value to rise if that is happening.

At that point you have 2 options sell and keep the loan or keep paying the loan.

debtfreeby35? · 10 December 2014 at 1:57PM

I foolishly didn't get the rates when I rang earlier but she did mention 4.78 in a conversation about walking away with the unsecured part as a personal loan and the rate increasing accordingly.

PinkTeapot - exactly re having to pay the full amount back. I guess ultimately if I over pay the unsecured part it means I could walk sell the house and not take the unsecured loan with me. BUT keeping it there gives me a bit of freedom to take less for the house and pay the loan off in time.

Having just paid my personal debt off, I really don't want to start again with debt.

getmore4less · 10 December 2014 at 1:58PM

debtfreeby35? wrote: »

I really don't want to start again with debt.

you are not starting again you allready have the debt.

kingstreet · 10 December 2014 at 2:02PM

getmore4less wrote: »

What rate does the unsecured part go to if you move the mortgage away from NRAM?
(by remortgage or paying it off)

Delinking the unsecured loan sees the rate increase by 8% to 12.78% variable.

Thrugelmir · 10 December 2014 at 2:14PM

At least by tackling the unsecured element first you'll see the rewards of your efforts. With large mortgage balances, overpayments seem to make little difference to the rate at which the balance reduces. However if you set yourself smaller objectives to achieve. Then its far easier to maintain momentum and not become disheartened.

debtfreeby35? · 10 December 2014 at 4:08PM

getmore4less wrote: »

you are not starting again you allready have the debt.

I should have been clearer...

I don't want to start again with personal debt. A mortgage is a totally acceptable thing to have, £25K of personal debt is not.

getmore4less · 10 December 2014 at 4:28PM

debtfreeby35? wrote: »

I should have been clearer...

I don't want to start again with personal debt. A mortgage is a totally acceptable thing to have, £25K of personal debt is not.

Unsecured Loan: £8658

Thats personal debt not a mortgage.

pinkteapot · 10 December 2014 at 4:33PM

debtfreeby35? wrote: »

I should have been clearer...

I don't want to start again with personal debt. A mortgage is a totally acceptable thing to have, £25K of personal debt is not.

The only way to have no debt after selling up is to save up the amount of negative equity before you sell, plus the amounts needed for estate agent fees and solicitor costs. Whether you put money in savings or overpay, the net is the same. If you're £13k in negative equity then you need to save up approx £15k to sell. Otherwise you will be left with debt afterwards.

the_matrix · 11 December 2014 at 1:03AM

Not a chance I'm afraid you are stuck.

Bravo_Zulu · 13 December 2014 at 12:31PM

Thanks for all the comments and advice, I've decided to direct the overpayments to the secured part of the mortgage to give the option to sell and delink the unsecured amount in the future. You're right, it is already a personal debt - I just didn't see it as that because it was part of the mortgage.