Negative Equity But Want To Sell

[Loopyloo]

Hi guys,

Do you know if mortgage lenders allow you to sell and carry over the shortfall onto the new mortgage? We are in negative equity, house needs loads done to and it's really not worth spending the thousands on doing it - plus we don't have the money to do it!! There are some new builds up by me and they are pretty reasonable, plus with the new government scheme - 5% deposit 20% equity loan scheme you only need to get mortgage for 75% of house price. If the lender then allowed my to carry over the shortfall, my total mortgage including shortfall would be less than what I have at the moment.

We bought when prices were high and don't want to be stuck here for years waiting on prices rising whilst the house just deteriorates.

[oscar]

Re: Negative Equity But Want To Sell

Some lenders do, some don't. It will probably also depend on your Mortgage Product.

It will also depend on how much your "new" mortgage will be. I would assume this would be the shortfall, plus the new price - is there a large difference between this and what you currently owe?

[Never-In-Doubt]

Re: Negative Equity But Want To Sell

You need planB

[PlanB]

Re: Negative Equity But Want To Sell

I'll ask you a few more questions about this later to get the full picture, but the instant answer is that some lenders will let you carry over the shortfall so you can escape negative equity. Not all of them though. Who is your current lender?

Only a few mortgage lenders are participating in the Help to Buy scheme so if your current lender isn't you wouldn't be able to carry over any shortfall (obviously).

I've remembered you live in Scotland so here's a bit about the Help To Buy scheme if you haven't already seen it. I think it is an excellent Government policy which is aimed at people trapped in situations like yours.

http://www.scotland.gov.uk/Topics/Bu...ng/help-to-buy

Are you convinced that selling up is the right thing to do or are you simply feeling the pressure of debt? I plan to sell up every time I get a letter from a DCA but I usually get over it after a sleepless night. In fact I had one of those only last night.

[Loopyloo]

Re: Negative Equity But Want To Sell

My current lender is Yorkshire Building Society and as far as I know they are not participating in the scheme - so that blows that idea out! I think the only way we would have been able to do it would have been through the Help to Buy Scheme unless I ask the Bank of Mum & Dad

We have been wanting to move for a while, nothing to do with the DCAs more just the fact there are some great deals out there on new builds that will need minimal work done on them. My house needs new bathrooms, kitchen, upstairs carpets and we don't have the money to do it, it'd will take years to save it up.

[PlanB]

Re: Negative Equity But Want To Sell

My house needs new bathrooms, kitchen, upstairs carpets and we don't have the money to do it.

I'm afraid you've just awakened my inner Sarah Beeny. I may need to talk you out of this plan

[PlanB]

Re: Negative Equity But Want To Sell

My current lender is Yorkshire Building Society and as far as I know they are not participating in the scheme - so that blows that idea out!

Not necessarily because Yorkshire Building Society have better deals than some of the Help to Buy lenders participating in the scheme. You'd still need to find the 5% deposit unless you were downsizing substantially and a deal could be done. In other words if your mortgage on the new substitute property was going to be a lot less than your current one. In effect you'd be asking for a 100% Loan To Value mortgage but at the same time YBS would be recovering money owed to them on a house which is in negative equity and therefore a risk. For example if they repossessed your current house they wouldn't get back what they're owed.

I think you need to post up the maths but if that's awkward then feel free to PM me the details and I'll give it some more thought.

Here's some blurb on Yorkshire Building Society's deals which beat the interest rates on the HTB scheme:

http://www.theguardian.com/money/201...interest-rates

[Loopyloo]

Re: Negative Equity But Want To Sell

I'm afraid you've just awakened my inner Sarah Beeny. I may need to talk you out of this plan

Ha, I've sat at work all day with far to much time on my hands thinking oh what shall I do.....oh I know I'll move house! Tomorrow I'll have some other rash impulse to oh I don't know......move abroad! I actually looked into that not long ago, searched for jobs for my partner - he wasn't too impressed!

[PlanB]

Re: Negative Equity But Want To Sell

Tomorrow I'll have some other rash impulse to oh I don't know......move abroad!

Now you're talking I fantasise about renting out my gaff in London and renting a place in Ibiza for a year. It's gone beyond a fantasy because I've checked out house prices and the nearest supermarkets for Marmite availability.

Don't abandon the idea of selling up yet while we explore all your options. I so love a spot of house shopping Being in negative equity isn't the end of the world and it always grows out of it eventually.