# Negative Equity Question



## Nationaldude (18 Mar 2010)

We would like to move to a bigger house but at present our house, like many others, is in negative equity by about 20-30k. We can afford to cover about half of this amount if we were to sell up, providing we got our asking price of course.

 Anyway, my question is if we were to sell up for a loss and still owe 20-30k on our mortgage, how difficult would it be to take out a new mortgage to buy our bigger house? Are banks even dealing with this type of situation?


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## missdaisy (18 Mar 2010)

So you have about €15,000 savings available to you which you would use to pay half your negative equity. This would mean that you would then have €15,000 debt and be looking for 100% mortgage for your next house? Bank wouldn't allow this.


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## Nationaldude (18 Mar 2010)

Thank you missdaisy i hadn't thought of the 100% mortgage, guess we'll just have to sit tight and wait to see what happens to the market over the coming years or maybe look into building an extension instead, our house is detatched so there shouldn't be a problem there.

Thanks again.


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## tenchi-fan (18 Mar 2010)

banks in England started doing a 120% mortgage.. 90% for the new home and 30% to carry the negative equity with you! (something along those lines)

At the moment banks here only allow 92% mortgages but hopefully they'll address this issue soon. It's not a nice situation for a couple with a baby in a one bedroom apartment but luckily you're not in that situation.


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## MrKeane (18 Mar 2010)

tenchi-fan said:


> banks in England started doing a 120% mortgage.. 90% for the new home and 30% to carry the negative equity with you! (something along those lines)
> 
> At the moment *banks here only allow 92% mortgages but hopefully they'll address this issue soon*. It's not a nice situation for a couple with a baby in a one bedroom apartment but luckily you're not in that situation.


 
Yes, 120% mortgages are just what we need.

OP should build an extension, €15K will go a long way these days and you avoid all the hidden costs of moving like solicitors, movers, storage etc. etc.


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## tenchi-fan (18 Mar 2010)

MrKeane said:


> Yes, 120% mortgages are just what we need.



In certain circumstances.. I gave an example! 

Here's another.
A man lost his job in Cork and was offered one in Galway. But he can't sell his house in Cork because it would not pay off the mortgage. So the solution is to carry the negative equity with him so he can still be a home-owner and gainfully employed. It makes perfect sense. 

Negative equity essentially ties people to a certain area at the expense of their family and job situation.


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## househunter! (18 Mar 2010)

100% mortgages are a bad idea never mind 120% mortgages. it takes long enough and costs enough to repay a 92% mortgage never mind adding 20% negative equity to the situation


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## tenchi-fan (19 Mar 2010)

househunter! said:


> 100% mortgages are a bad idea never mind 120% mortgages. it takes long enough and costs enough to repay a 92% mortgage never mind adding 20% negative equity to the situation



Yes, but you STILL have to repay the "negative equity" (i.e. all of the loan!) whether you stay in your own house or move to another.

Look at it from the point of view that if you changed mortgage providers, the new loan would essentially be 120% the value of the house. i.e. 100% which is the value of the house + 20% which is the balance of the loan.


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## AlbacoreA (20 Mar 2010)

tenchi-fan said:


> In certain circumstances.. I gave an example!
> 
> Here's another.
> A man lost his job in Cork and was offered one in Galway. But he can't sell his house in Cork because it would not pay off the mortgage. So the solution is to carry the negative equity with him so he can still be a home-owner and gainfully employed. It makes perfect sense.
> ...


 
Could he not sell the house, and then rent in the new location.


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