£20k negative equity and need to move!!

[Deleted User]

Hi

I currently have a Lloyds tsb mortgage and we are in £20k
negative equity. We live in a 3 bedroom house but need to upsize due our family growing!

Are there any options available to us other than giving out property back to the bank so we can rent a 4 bed property?

Our current mortgsge balance is £97000 and value around £80000!

A 4 bed would cost around £130000.

I can afford the borrowing on income multipliers but who/where would lend?

We have £5000 in savings

Thanks

Thrugelmir

You need to start saving , overpaying your existing mortgage and building equity is one option.

stator

Deleted_User wrote: »

Hi

I currently have a Lloyds tsb mortgage and we are in £20k
negative equity. We live in a 3 bedroom house but need to upsize due our family growing!

Are there any options available to us other than giving out property back to the bank so we can rent a 4 bed property?

Our current mortgsge balance is £97000 and value around £80000!

A 4 bed would cost around £130000.

I can afford the borrowing on income multipliers but who/where would lend?

We have £5000 in savings

Thanks

You can't pay off the old mortgage so you can't sell it. In some cirumstances the bank might let you move to a cheaper property but they definitely won't lend you any more money.
If you could rent out the current house (with permission from the bank) you could rent somewhere else.
You can't just 'hand back' the old house, you are still liable for the £20k shortfall.
Given what you've said it's most likely you will have to stay where you are and forget about moving. Is there any scope to convert the loft, build an extension, split a bedroom?

Wolfie1974

Hi,


You are in a difficult situation and will end up with 20 grand debt if you just hand the house back. Are you really desperate to move? You have done well to get £5000 in savings. Is there any way you could use this discipline to overpay a regular amount. Check out some overpayment calculators to see how quickly you could make ground on that negative equity!

kingstreet

If you can get your savings to 10%, you can use the LBG negative equity product, but you must be able to get to 90% or less of the new property purchase price.

ACG

If you hand your house back to the bank I think you can forget getting another mortgage for some time. Handing it back is not a get out clause and will hammer your credit report - you may find you even struggle to rent in the future.

You may be able to ask for Consent to Let from the lender - that allows you to rent out the property leaving you to either rent somewhere new or save up the deposit needed to get a new property.

dimbo61

You need to stay where you are and look at IKEA and other furniture store with Ideas about using the rooms you have better.
Keep paying the mortgage and overpay + Improve the property over the next few years