So - negative equity?

m00m00

dolce_vita wrote: »

I won't forget, don't worry. I was there.
Interest rates were at 15% for about a week.

And anyway, I'd rather pay 15% on a 50k mortgage than 6% on 150k

here comes the maths

15% on 50k means the following

monthly payment 640, total interest paid 142,125, total repaid 192,125


6% on 150k means the following

monthly payments 966, total interest paid 139,936, total repaid 289,936


so the amount of the interest paid, is actually very similar

of course you have 326 extra a month in your pocket on the first example, to invest as you wish

if you were to overpay the 326 onto your mortgage on the 50k example (so 966 payments on both), the mortage would be paid off in 84 months.

(assumptions made, 100% mortgages, repayment mortgage)

Montymoo_2

Im am really worried about negative equity...we bought our semi for 110,950 now semis on our road arent selling at £108,000. Granted ours does have more land but its more overlooked than the others. We really want to move next year due to family commitments changing but now im scared we are going to make a loss

carolt

It's a hard call, isn't it, Montymoo? We were nearly in your situation - worried that we were borrowing up to (above?) our limits to buy a house, which would potentially land us in negative equity if the market fell.

In the event, we were let down by dodgy estate agent/vendor (not sure which most to blame) and so didn't buy. That was in February. Since then, prices round our way have risen by 25% - asking prices that is, not much actually sold at those levels. We decided enough was enough and have gone for the 'security' of renting - at least we face no mortgage debt (would have been 250K odd in our case), no worries about repairs or maintenance, rent fixed for a year at least and in an easy position if we want to move.

Trouble is, you've made your bed and have to lie in it. When you bought, you presumably did your own calculations about what you could afford, how the housing market would fare and how long you wanted to stay in your property. I wish I'd bought years ago when it was loads cheaper - but I didn't. You have bought - 'making a loss' can happen.

As the blurb says, 'Please note house prices can fall as well as rise...'.

Running_Horse

Kez100 wrote: »

I would be interested in seeing evidence of which lenders used to let you port negative equity. I see I am not the only one on this thread that was actually in a position of negative equity in the early 90's and couldn't find any way out but to 'save' ourselves out of it.

Not got any evidence, other than a neighbour at a party who said he was planning to do something similar, and indeed did so shortly after. No idea where he and his family ended up, but they moved a good 12 years before me.

lynzpower

mattb001 wrote: »

Because generally, ex council properties tend to be in the most undesirable locations. From what I've read of the crash in the 80s, ex council terraces lost the most % value.

PLease though, do not underestimate the value of your property to someone else. Im not going to sing about the market, I definately think a downturn is happening. However, the perfect property I am looking for is a 2 bed split level masionette or flat, ex council. many of my freinds feel the same.

If you are feeling jittery sell now. Price aggressively, and get out of it. there is no value at all, in you sitting tight and worrying.