Bank ok negative equity sale now say no??

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?
 
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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