The first question we are often asked at Negative Equity UK is ‘can I get out of my mortgage’?
Sometimes our clients have found their once affordable mortgage has become unmanageable. Sometimes they have had a change of circumstance and they need to move house, but their property is in negative equity.
Whatever the situation, the good news is that is possible to get out of a mortgage.
Interest only mortgage.
Before the property crash in 2007, interest only mortgages were popular with borrowers who were struggling to get on the property ladder, but who couldn’t afford a regular repayment mortgage.
Under the terms of an interest only mortgage, the borrower only has to make monthly payments to cover the interest on the mortgage, but once an agreed term has passed, they will have to pay the full value of the loan.
Banks were supposed to ensure that borrowers taking interest only mortgages had a repayment vehicle that would allow them to pay off the debt when it is due, but often failed to do so. Now, research by Citizens Advice shows that there are one million interest only borrowers in the UK with no plan to repay the loan.
The end of any relationship is a difficult experience, but being financially tied to your ex by a mortgage in negative equity can make the situation much more complicated at precisely the time you want to move on and start rebuilding your life.
There’s a common misconception that if a property is sold the negative equity amount is then split between each of you, but unfortunately this is not the case.
A lender treats each borrower the same, meaning that 100% of the debt is your responsibility regardless of who lives in the property or who makes the payments.
Thankfully, at Negative Equity UK, we can help. We have successfully negotiated hundreds of cases for clients who needed to sell a property in negative equity and negotiated a settlement with their lender to write down the shortfall from the sale.
We recently helped two clients, Julie and John, who had a property with an outstanding mortgage of £150,000. After divorcing, they both wanted to sell the house, but were only able to get £100,000 for it. We were able to negotiate with their lender to write off £43,000 of the remaining debt, leaving them with only £7,000 to pay off between them.
Change of Circumstance.
There is a whole range of reasons why a mortgage, which was perfectly affordable to begin with is no longer manageable, or why a property might not be suitable anymore.
We’ve helped clients who have been suffering from ill-health which has forced them to give up work, or meant they had to move in order to cope with reduced mobility. We’ve have helped many people who could afford their mortgage until they lost their job or had their working hours cut. With the trend toward longer mortgage periods, we’ve also had many clients who have retired before they finished repaying their mortgage and found their income didn’t cover their repayments.
Another of our recent clients needed to move house for medical reasons, but was trapped in her old property by negative equity. She owed £132,219 on her mortgage, but was only able to sell the house for £60,690, a shortfall of £71,529. We were able to negotiate with her lender to write off 84.84% of her debt, leaving our client with only £10,840 left to pay.
Our client said; “Due to medical reasons, I needed to move house, but I couldn’t because of negative equity on my property. My lender recommended that I speak to a financial advisor. I looked at a lot of reviews online and decided to get in touch with Negative Equity UK, they seemed to be best suited to my situation.
“From the start, the whole process was so simple, a lot easier than I thought. I was kept informed the whole time and they agreed on a settlement that I could afford.
“I would definitely recommend Negative Equity UK. Excellent customer service, professionalism and the process was so simple.”
How can we help?
There are a number of possible solutions we can offer to resolve your property debt problems, depending on your circumstances, but for many of our clients a sale and settlement is the only solution to their problem.
We have successfully negotiated hundreds of cases every year where we have arranged the sale of our clients’ homes and reached an affordable debt settlement with the lender, like the cases above.
Whatever your circumstances, the first step to dealing with your property debt is to contact Negative Equity UK for an initial free, no obligation consultation with one of our advisor.
Call us on 0161 631 2727 or go to our website and arrange for us to call you at a time that suits you.