Negative Equity Loan Seeker

NegEquityDealSearcher

Dear MSE/Anyone sensible,

I was interested in M&S's 2.8% £7500 loan to bridge the gap in my property's negative equity. Obviously, I can't get a mortgage lender to give me a new deal because my property is worth less than my remaining balance. I'm stuck on a 4.54% variable mortgage rate.

With the £7500 2.8% loan I could bring my mortgage balance down and get a cheaper mortgage deal, before interest rates rise again.

Is it worth me doing this?

Regards
Stephen

System

Given that most mortgages want at least a 95% LTV merely bridging the gap in the negative equity won't be sufficient, you'd need to lower what is owed to an amount that they're prepared to lend to. How are you arriving at working out your property is in negative equity?

Before deciding to take out any lending though have you approached your existing lender to see about remortgaging to a better deal with them? When I did it with my lender this year I picked up the phone, told them what deal I wanted and the only thing they asked was if I could afford the payments. All done over the phone, nothing to sign, no proof of income, property value or anything required, no fees, I just started on the new rate the day my existing fixed deal ended.

foxy-stoat

I would say that you have a very high chance of not being accepted for a loan for £7500 @ 2.8% interest - maybe your better off with a couple of credit cards with money transfer options and get the cash that way.

Good luck and do report back if you apply for the loan and get the best terms.

MallyGirl

you might struggle with affordability as they will take the loan into account when calculating what they are prepared to lend