Bank ok negative equity sale now say no??

K

Karencc

Registered User
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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
 
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
 
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
 
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??
 
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.
 
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
 
Does child benefit count as income? Just want to be correct in my calculations
 
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.
 
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?
 
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?
 
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.
 
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
 
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
 
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
 
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!
 
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.
 
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?
 
Last edited:
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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