If you want to upsize but think you're stuck with your negative equity property, think again. With the right help and advice, you do have options.
As you probably know, negative equity is the term which describes the situation where a property’s current market value is less than the mortgage owed on it. All types of people are concerned about this problem.
For some it’s the disillusionment that comes from what they believed to have been a sure-fire investment failing to deliver the profit they had imagined. For others it’s the disappointment of having watched helplessly as all that hard-earned money they spent on buying a home drained away due to events totally beyond their control. And for some it’s the deep despair caused by what now feels like no-escape entrapment. They are people who have outgrown their home and now require more space. In their case additional space is a necessity rather than some mere wish to have ‘something bigger’.
But does negative equity mean they do not have the freedom to move on to a property with more room(s)?
Because we deal with those questions every day, Negative Equity UK know all about the problems created for anyone in this position. We also know the answers. And the good news is that there are options; victims of negative equity are not condemned to continue living in a home which is too small for their family’s needs. With the right help, they can escape the noose of negative equity.
Of course, some parts of the UK were affected more than others as a result of the economic crash of 2008 and the subsequent recession. North-west and North-east England suffered greatly, along with Northern Ireland which saw the biggest slump of all. In each of those three regions, property prices plummeted alarmingly. Thousands were – and still are – affected, with tens of thousands (and sometimes much more) wiped off market values.
Not surprisingly then, most of Negative Equity UK’s rescue and redemptive work is done in the north-west and north-east of England and Northern Ireland. So what does this aid consist of? How are we able to help those who have outgrown homes in negative equity? And will they be able to move as a result?
For those who have to move, waiting for a market recovery and an increase in property values is not an option. If you now have three children where previously there was one, hanging on for a market upturn is not going to work for you. But if selling your too-small home would leave you unable to clear your mortgage, never mind raising significant and sufficient additional money for a deposit on a bigger property, you need help now.
Negative Equity UK’s team of experts can advise on all of your viable options. In addition, we will negotiate with lenders on your behalf. And our success rate as negotiators is formidable. Some lenders are more generous than others, in that they may permit customers to move house by transferring mortgage debt to their new property. In other words, they offer a negative equity mortgage.
A negative equity mortgage is not cheap, however. And with lenders invariably finishing on the ‘up’ side of the transaction, it is you, the borrower, who will be providing the profit. You will also have to put down a deposit, which is going to require new money. Note that it is not a case of the lender permitting you to take your current mortgage plus some more cash on top. And the other ‘extras’ involved in house purchase – stamp duty and fees – must be factored in too.
Renting out your existing property might be an option, but that cannot be done without consulting the lender who advanced the mortgage on it TO YOU, not to some previously unmentioned tenant. Their view of any such proposal probably will depend on the precise nature of your circumstances. If for example, you are moving to a different part of the country for work purposes, they are likely to view the matter much more favourably than if it seems you are simply trying to have someone else make the monthly repayments to which you signed up.
So if you have negative equity and need to move house, much will depend on how accommodating your mortgage provider is willing to be. Will they let you transfer your mortgage to a new property? Or re-mortgage under a different deal? Or possibly consider some other finance proposals?
Fortunately Negative Equity UK can help you. We will advise you as to what options are available and, using our vast knowledge and negotiating skills, liaise on your behalf with your lenders to secure the best possible deal.
So avail of our know-how. Pick up the phone and contact us for a free initial consultation to see how we can help.