Getting a 2nd mortgage being in negative equity

[dowlinj]

I own a house and am currently in negative equity (probably to the tune of around 70k). Myself and my partner will be looking to move in the next year or 2 and should have a enough cash saved for a 12-15% deposit by then. However, we don't want to sell our current place given the negative equity situation. We would be looking to rent our current place out and get a bigger place. We are both in full-time employment with a good combined salary.

Am curious to know if we would get approval for another mortgage or would the bank need more security?

 

[Brendan Burgess]

I don't think that this is a wise strategy at all.

If your borrowings exceed the value of your assets, you should not increase your borrowings to buy more property. You are exposing yourself too much to further falls in the price of property.

If at all possible, you should continue to live in your current property and use your savings to pay off the negative equity.

You will have to buy a house the old fashioned way - i.e. pay off the negative equity and start saving for a deposit all over again.

Brendan

 

[dowlinj]

Thanks. Staying in our current house isn't going to be an option. I reckon I'll probably end up renting it out and renting another property to live in. As you say, paying off the negative equity will need to be done.