We see a lot of clients, experiencing a lot of different problems. Some of our clients are homeowners who need to move, but find themselves trapped by negative equity. Others are landlords, whose investment is threatened by negative equity.
In a series of articles, we’ll look at some of the cases we’ve successfully resolved.
Stuck in a starter home.
We recently helped a couple who bought a property in 2007 as a starter home, their first foot on the housing ladder. Since buying the property, however, they had two children and their family no longer fitted in the house.
They needed to move to a bigger property, closer to Belfast city and their family support network, but their house was in £64,090 of negative equity, so selling it wouldn’t cover the outstanding mortgage, let alone pay for a deposit on a new house.
What were the options?
A number of options were available to our clients and their lender, Santander, in this case. Our role was to find the best option and reach agreement about this with the bank.
The first option was repossession. This was the worst option for both the owners, who would have had a greater residual shortfall to pay, and the bank, who would have made less than market value had they sold it on and would have had to pay significant costs.
The second option was for the owners to let the property. This would have left the family vulnerable to financial losses if the property were to be vacant for any length of time while they were paying to live elsewhere.
The last option was a shortfall sale, with the owners paying £10,000, which they had raised with help from their families, to Santander as full and final settlement. The bank agreed to this settlement, which allowed them to minimise the loss they suffered on the mortgage and avoid the cost of repossessing the house.
We can help you.
While the £10,000 settlement may seem like a lot of money, it is significantly less than the outstanding value of the mortgage and allowed the young couple to begin rebuilding their finances, without the mortgage.
If you’re in a similar situation, stuck in a property that is no longer suitable for you or your family, unable to move due to negative equity, we can help. We’ve written off an average of £71,000 for clients like the family in this case.
Contact us on 0161 631 2727 or online at negativeequityuk.com and book a consultation.