buying a house in negative equity...

loonybirdy

Thanks guys for all your comments...

To Squuatnow and co, I am not interested in the HPC discussion and neither do I wish to fritter my money away on rent or have the hassle of squatting...

I want to BUY a house...so pleeese re-read my initial post which was regarding problems with lenders maybe preventing the sale of a house in neg equity...!:rolleyes:

I did not want to be involved in the rent/buy/squat debate - I just wanted advice on possible pitfalls of neg equity...

IveSeenTheLight

Gorgeous_George wrote: »

I still wouldn't buy at today's prices in many parts of the UK.

GG

Me too.
Its about finding the right property in the right location at the right price.
There are still loads out there in a rising market.
Sure some areas are seeing a slowing down of the market, others are reporting their highest rise

IveSeenTheLight

fc123 wrote: »

we bought our 1st home in 1989..desp to get out of highrise estate...we renovated and it dropped in "value"...6 yrs after we trade up.......any neg equity has long been banished from our sums

It seems factual proof from someone who lived and suffered through the last crash and still believes there is a benefit in the long term.

Well done FC 123:T

david29dpo

Back to the OP. Get your solicitor to confirm the lender will allow the sale. He is the best person to explain to you the problems.

Richard_Webster

There is obviously wisdom in all the posts about the dangers of possibly buying an over priced house etc OP does need to consider all that very carefully.

However it might just be that the seller got a 95% mortgage when he originally purchased and the lender then added it high loan to value fee to the loan and he has now got into arrears and owes them. Add the estate agents' charges and legal costs of the sale etc and the seller can quickly end up owing a substantial amount more than the value without the value going down at all!

For instance - house at £200K with £190K mortgage, high loan to value and set up fees from lender could be £2,000, early redemption fee on mortgage could be £4,000, agent's commission could be £3,500, legal costs £700, that puts them £200 over to start with and a little bit of arrears or higher fees etc/redemption penalties added to mortgage easily makes it worse.