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UC - 2nd Property in Negative Equity, Questions About Renting It Out?
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Most mortgages on let properties are interest only. So there is no reduction in capital.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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I'm surprised negative equity is taken into account & not the value of the flat.
Due to the negative equity it cannot be sold.
Just because you are in a negative situation, does not stop the flat being sold. Just it will still leave you with a debt.
Life in the slow lane0 -
Mortgage lenders wont agree to remove their charge on the property unless the mortgage is fully paid off. So a sale can't happen with negative equity unless the seller has a way of raising the money to clear the negative equity.born_again said:I'm surprised negative equity is taken into account & not the value of the flat.
Due to the negative equity it cannot be sold.
Just because you are in a negative situation, does not stop the flat being sold. Just it will still leave you with a debt.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
born_again said:I'm surprised negative equity is taken into account & not the value of the flat.Yes, I guess this is one of the few examples were a debt is taken into consideration when determining the amount of capital (value of the debt deducted from value of the capital asset). If you had £10,000 in the bank and a £20,000 bank loan, you'd have £10,000 in capital for UC purposes and the bank loan would be ignored.Our green credentials: 12kW Samsung ASHP for heating, 7.2kWp Solar (South facing), Tesla Powerwall 3 (13.5kWh), Net exporter0
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They would be different entities, Account A, Account B, Account C. To calculate capital you would take each account, if Account C is in debt then it's ignored as there is no capital. To get total capital you combine everything in this case just account A & B plus all capital elsewhere.
The Act doesn't say debt is ignored, but the way capital is calculated it doesn't have too.
For property it's one entity, any capital will be net. A debt will always be considered on each entity.
Let's Be Careful Out There0
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