House lost 50% value, outgrown house, can't move, any options?

TiredDad_2

Hi everyone,

Really appreciate some help on this one. Wife and I bought house in 2007 for 230k, it's been valued at 115k. We bought it with 100% mortgage, and paid interest only for a few years, so we have 215k mortgage left.

We now have a 1 year old and a 2 year old and have outgrown house. We make ok money each, so we can meet mortgage payments ok at moment. Minimal credit card debt.

Mortgage company are basically saying tough, and won't even let us move negative equity to a new mortgage.

Do I have any options at all? i can't see anything that would work!!

Thanks everyone for any help

missbiggles1

The obvious solution would be to extend your existing property funded by savings or loans. That's what most people do.

moneyistooshorttomention

My first thought is to wonder how such a loss in value could be the case.

I see you bought it in 2007 - so I could understand why it may not have gained value in that time or possibly lost a tiny bit of value.

How come it's deemed to have lost so much value in that time? I find that a bit astonishing and am wondering what reasons they gave you for saying its worth so much less. What did they state as their reasons for saying that?

My second thought is why you chose to have an interest-only mortgage, though it would appear you can afford a standard one (well - you could 3 years ago presumably?)

TiredDad_2

Thanks for reply - My only fear is throwing good money after bad, as we will never get the value of that back. It might be the only option in which case we'll go for it, but just wanted to check there weren't any options or schemes people were aware of...

Landofwood

Why has it dropped so much?

Is this Northern Ireland or Burnley?

stator

Well unless you are in serious trouble and considering bankruptcy, it doesn't seem like you have any options.
You could default and hand the keys back but you would still owe the bank over £100k as they would sell it for less than £115k.
If you want to remain on the so called 'property ladder' then you'll just have to stay put and ride it out.
Extending is usually a good way to add value to the property so have a look around and see how much your house would be worth with an extra bedroom.
If you spend £15k but it adds £30k to the value then you are reducing your negative equity.

ViolaLass

TiredDad wrote: »

Thanks for reply - My only fear is throwing good money after bad, as we will never get the value of that back.

You will always have to pay it back at some point - you can't reduce how much you chose to spend back then, you can only reduce how much you owe now.

saverbuyer

moneyistooshorttomention wrote: »

My first thought is to wonder how such a loss in value could be the case.

I see you bought it in 2007 - so I could understand why it may not have gained value in that time or possibly lost a tiny bit of value.

How come it's deemed to have lost so much value in that time? I find that a bit astonishing and am wondering what reasons they gave you for saying its worth so much less. What did they state as their reasons for saying that?

My second thought is why you chose to have an interest-only mortgage, though it would appear you can afford a standard one (well - you could 3 years ago presumably?)

There's this little known part of the UK .Goes by the name of Northern Ireland. Easy place to forget about, I try to forget about it pretty often and I live there.


Prices here dropped 60% since 2007.

TiredDad_2

It's over in Northern Ireland - sadly not a unique situation, our neighbours are in similar positions, in fact half the country is in negative equity. So frustrating.

TiredDad_2

Thanks all for replies. Considering bankruptcy as we hardly have any savings - been told we could be in and out in 12 months and buying a house again within a year or two. Not sure of truth of that.

TiredDad_2

Oh, as for interest only, we couldn't afford the capital repayments at the time, or we could but with no money left over. But we can now, so bank are happy to tell us to go away.