Neg Equity in NI-any other options with cash to put down

rover25

We are 8 yrs into repayment mortgage & thinking about how we can move.
Bought house in 2007 for 187,000. Now mortgage is approx 158,000.
We are in huge neg equity- prob 70-80 grand! Ulster Bank/RBS mortgage. We are in a small town in Northern Ireland so prices have more than halved.
We want to move somewhere closer to my husband's & my work & somewhere our children can play safely outside ( area we are in is not great)
My eldest child is starting nursery this coming sept which is next door to my school where I teach & she will be attending my school from next year. This is one of reasons we want to move - to be closer to school/work etc
We have approx £20-25,000 in cash. I know many people will say put it towards neg equity but we are wondering if this could be used as a deposit towards a second property in the area we want to move to & rent out our current property. Either way we will probably end up moving by the end of this year but not sure if we have any any other alternatives other than renting somewhere else & overpaying towards our neg equity? Thank you

rover25

Just bumping this to see if anyone has any advice.

stephenni1971

How much could you rent your house for?

How much are your monthly mortgage payments?

rover25

Our mortgage are payments are £778 repayment. We could rent it out for £450 per mth. There is a shortfall but feel we could cover this shortfall ourselves. Not sure what bank would say as aware of the 125% of interest payment and of course that doesn't meet it. We have a Joint income of approx £63k.
We wouldn't be looking to purchase anything that would leave us with more than £450 per month as new mortgage because at least then it would be balanced out by any rent being received.

rover25

Our other hope would be some sort of negative equity mortgage that we could sell house and carry the shortfall over to new mortgage amount. Like the schemes being operated in the Republic of Ireland and with some Lenders in the UK. I think Halifax and Nationwide might do this.

stephenni1971

Y need to speak to UB first and see if they would be prepared to let you go onto consent to let.

It may be possible to get a new mortgage but affordability would be tight. If UB won't allow consent to let then y don't really have much option.

I stand to be corrected but negative equity mortgages are normally for existing customers.

Thrugelmir

rover25 wrote: »

We are 8 yrs into repayment mortgage & thinking about how we can move.
Bought house in 2007 for 187,000. Now mortgage is approx 158,000.

Why has your mortgage reduced so little in 8 years? Is it interest only?

You need to start overpaying to reduce the debt owed and ultimately put yourself into a positive equity position.

rover25

No the mortgage is repayment. We have overpaid approx 5 grand but was reluctant to put large down payment on it as thought it might be better used as deposit if possible on another property.
Yes I think you are right Stephen about the negative equity mortgages. I know they exist with UB in the south but haven't heard anything up here. Just wondering have you come across them in your line of work?

stephenni1971

Call UB tomorrow and let us know what they say.

Thrugelmir

rover25 wrote: »

No the mortgage is repayment. We have overpaid approx 5 grand but was reluctant to put large down payment on it as thought it might be better used as deposit if possible on another property.

What term in years is your current mortgage?

rover25

Originally was 35 years. 27 now