# Bank ok negative equity sale now say no??



## Karencc (7 Sep 2013)

Bought my house single application in 09. Married now and approached bank in may re selling the house and taking debt with us (a mortgage advisor) she was v positive and we left thinking great but hard part will be selling house. House sold v quickly and we then went back to bank regarding our new mortgage and now it's all change from them. 
Bought house 260 borrowed 239
Sale agreed 138 
New mortgage 180 plus neg equity
Thing is we only technically want a top up of less than 30000 we are not looking to increase the overall amount much plus there are now two of us jointly applying. Joint income 71000 pa 
We were originally told we would need to sell for no less than 129 and we are v happy with price we got now bank says we can sell but only have a total mortgage of 126???? Leaning us less than 40 grand to buy with as that figure includes negative equity. 
What is going on? Anyone any ideas? I'm so stressed. Why give us the go ahead and have us incur cost of selling. It's not like the figures were only a bit off! 
In total limbo would live some advice


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## Brendan Burgess (7 Sep 2013)

Hi Karen

I can't follow your figures at all. They seem to contradict each other. 
 Can you lay it out line by line

Current mortgage balance outstanding: 
- Sale agreed: 
= negative equity of: 


Proposed purchase price of new house: 
+ negative equity:
= Mortgage required: 

Who is the lender? 
I presume you are on a SVR and not on a tracker? 

Brendan


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## Karencc (7 Sep 2013)

Edited by Brendan to try to clarify figures


Mortgage 221
Sale price 138
Neg equity 83,000
Cost of new home185,000 
Total required : 268,000
Less savings 8,000
Less Gift 15,000
= Mortgage required: 245,000


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## Karencc (9 Sep 2013)

Have arranged to meet bank on Wednesday so trying to arm myself with correct info and similar case studies. It angers me that with all that has gone on in recent years bank would still give bad advice and also we can comfortably pay back new mortgage and seem to fall within any criteria given??


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## Mrmr (9 Sep 2013)

Do you have any children as this will take away 200-250 euro of disposable income a month depending on the bank.

We were told 1000 euro per adult + 250 per child, per month, when we wanted to change an existing mortgage. Anything left over can be looked at for mortgage purposes.


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## Karencc (9 Sep 2013)

Yes we have 3 but still (as far as I can see anyway) have more than enough to comfortably meet repayments and fall into criteria. It has me very confused. I am public service and husband has permanent position in private sector


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## Karencc (9 Sep 2013)

Does child benefit count as income? Just want to be correct in my calculations


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## Karencc (9 Sep 2013)

Monthly net is 4450 or 4070 without child benefit. 
If I take away 2750 we are still left with 1700/ 1320 for monthly repayment which based on interest at 4.4% is 1277.86 a month on amount we are asking for.


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## Mrmr (9 Sep 2013)

In our case, no Child benefit was not income. We discussed all the figures as you have above with %'s and values and equity. 
We were then asked about income and at that point told about the disposable 1k per adult + 250 per child, also that child benefit was not included and finally any childcare portion would not be available either.
That added up to most of our income and it was clear we should not bother.

Your net monthly- 2750 must leave enough to service the debt over the number of years you have available, I think 65 is the limit.
You can play around with figures on karls mortgage calculator, hope that's of some use!

Which bank?


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## Karencc (9 Sep 2013)

Aib. We are only looking for a mortgage of 170200 plus the 83 we would be carrying. We certainly wouldn't put ourselves into s stupid financial situation. 
The bank say there are other "products" available ther than negative equity mortgage any idea what these may be?


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## Mrmr (9 Sep 2013)

So, are you looking at about 280k of debt at 4.4% I'm guessing 25 years maximum?
That's around 1550 on available of 1320.

Also another poster had an issue where the bank were wanting the new mortgage to be the same term, so if you can only have it over say 20 years then it becomes 1770.

I'm guessing these are the reasons for the reduction.


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## Karencc (9 Sep 2013)

I'm looking at 170200+ 83000 so 253000
Term Of mortgage was 35 years back in 2009 
They said we can have new mortgage over 33 years as my husband is 31 and I'm 28


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## Brendan Burgess (9 Sep 2013)

If you go in with a jumble of numbers, they will have little confidence in you.

This is like a jigsaw.

Your figures still don't add up. 

I have summarised the format and the bits you have given over the various posts in this post

http://www.askaboutmoney.com/showpost.php?p=1349193&postcount=3

Are these correct now?


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## Karencc (9 Sep 2013)

I'm not great with figures and have been trying hard to do my homework/ read case stories etc i have edited your figures but they are basically correct 
Current mortgage balance 221
Sale of current house 138
Negative equity 83
Cost of new house 185
Total required 268
Less deposit 15000
Less savings 8000
Mortgage required 245


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## Brendan Burgess (9 Sep 2013)

Sorry, your final figures did add up. I had made an arithmetical error which I have now corrected. 

It might be worth having a chat with a broker on a professional basis as to how to present your case in the best light. 

It's a bit odd if they gave you a mortgage of 239k as a single person, but won't give you €245k when you have two income. 

Brendan


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## Karencc (10 Sep 2013)

Yes that's what has me confused. And the fact that they were so positive at our initial meeting back in May. I feel we are ideal candidates and if the bank are not lending to the likes of us who are they limiting their lending to? Surely this would be key to getting the housing market up and moving again. Also to offer us 40k to purchase a new property is a joke and at no point have they had any issue with us selling our property, I see on forums some people have had difficulties with this. I guess the best thing to do is move forward with the meeting and have my homework done. Appreciate your help and patience with my figures!


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## Brendan Burgess (10 Sep 2013)

From the bank's point of view, you are in negative equity of €83k now. 

Your repayments will be higher after you purchase the new house. 

The risk to the bank increases quite a bit. 

You don't see it this way, but neither did any of the 80,000 or so people who are over 3 months in arrears today. 

Even if the bank gives you a negative equity mortgage, you should ask yourselves if this is right for you.  You have €75k negative equity now (€83k - €8k savings). 

Would you be better off paying down this negative equity as quickly as possible from your savings?  If house prices fall you will be delighted. If house prices rise, it's a mixed result.  Your negative equity will be eliminated quicker but the cost of a new house will be higher. 

If your current house is not suitable for your needs, you should also consider letting it out and renting a more suitable house, although buying is likely to be a much better decision.


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## Luternau (10 Sep 2013)

Is the fact that you are looking for a mortgage of more than 90% of the combined value of the new house plus the neg equity an issue?  The bank may have a cap on % that they will advance. Also you will be further in debt? Is this wise? Would renting or staying put (cancel sale) and paying down more of the mortgage not be a better solution?


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## Karencc (10 Sep 2013)

We are looking for 92% but would certainly be open to negotiate with them


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## Karencc (27 Sep 2013)

Just though I'd quickly update. Bank called before our meeting and said they had no idea where the apparent head lender had come up with such figures and we should be ok to proceed with ne mortgage. We were given such nonsense incorrect info such as we could get a voluntary sale for loss product which is only for customers in arrears! 
Strange thing is, at no point has there been an issue with us selling or having deeds released? Even though we have no property in mind at this stage as we lost out on property we were bidding for because we were so unsure of where we stood with bank. 
All very strange and confusing.


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## Karencc (23 Oct 2013)

So aib has offered to let us pay off our 86k negative equity over the next 7 years at our mortgage interest rate. This equates to 1200 a month. On the upside, we can proceed with sale of our house. We were declined a negative equity mortgage but advised to reapply in 6 months. So we would also need to rent over these 6 months. 
Major confusion and worry. Downside- no guarantee of future mortgage, could be left paying 1200 plus 800 or more rent and totally screwed if house prices rise at all. 
Anyone done this? Is it negotiable? Like maybe pay it back over longer period. If we are successful in 6 months the balance of neg eq will be pinned onto our mortgage. Could we try another bank while paying this off over 7 years?


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## Mrmr (23 Oct 2013)

Personally, I would stay where you are now- if you can at all reverse out of the Sale Agreed situation.
With children, for me it would be too big a risk to
a) lose your home b) owe 86k fixed NE c)have no guarantee of a future mortgage

Why not stay where you are for at least three years and throw all you have at the mortgage whilst having somewhere to live? At the worst you reduce the NE, at best the market recovers and helps you along.


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