Family earning approx 200k, in neg equity - any chance of a mortgage?

G

Gondolin

Guest
Situation as follows:

I earn 125k and my wife earns 100k gross

We have two mortgages at present:

Family home (3 bed semi) has mortgage of 325k, value seems to be about 370-380k (similar house on the road just sold at this - at peak houses were going for approx 630k)

"Investment" house (3 bed semi with 2-story, 2 bed own-door granny flat on same site). Mortgage outstanding is approx 360k. Bought for 400 in 06 (granny flat wasn't habitable then). Estimate that it could be sold for 200-240k as houses without granny flat going for approx 220. Rental currently on the property is covering repayment mortgage.

Other than the mortgages we have no personal debt, but we have no savings either mainly for the following reasons:
Over last 3 years we've had to spend 60k on repairs to the "investment property"
We also took a substantial hit on an investment in foreign property of approx 40k
I started my own company in 2006 and have invested 100k into it. Company is currently valued at 5M+ (based on a recent approach from another company and investor valuation) and I have a 30% stake

Now, here's the crunch. We would like to move to a bigger house as we have 2 growing kids, but I can't see any bank giving us a mortgage.

We are thinking that the only way we will be able to move house is to sell our home, sell the other property and take a personal loan for the negative equity which we could clear in about 3 years, build up some savings and then look to get mortgage approval.

Am I being realistic or too pessimistic?
 
Purely based on the information to hand and assuming the rest of your application is strong, a lender might be willing to lend if you can sell the family home and use the profit made on this as the deposit on the new home.

As your incomes are strong they may be willing to allow the negative equity on the investment property.

I suppose it all depends on how much you need to borrow for your next house.

www.moneybackmortgages.ie
 
Thanks for that. Both mortgages are currently with KBC if that makes any difference, so I'm not sure whether cross-securities will be an issue with them if we sell the main house.

We are also looking into a long term lease arrangement with the council for the other house that would ensure the place washes its face, without us having to be actively managing it, but to be honest if we could do, we'd almost prefer to just take the hit on it and wipe the slate clean.

Thanks for the response
 
Gondolin said:
Thanks for that. Both mortgages are currently with KBC if that makes any difference, so I'm not sure whether cross-securities will be an issue with them if we sell the main house.
Click to expand...

You're welcome.

Run it by KBC first - their answer may dictate what you need to do.
 
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