Negative Equity - How best to address to move on?

[Moup2017]

Hi all,

Looking for advice on my negative equity issue. Took out a mtg in 2006 with a friend on an apartment in Dublin. It is still in negative equity by approximately 35k (250k outstanding). It is on a tracker rate with Ulster Bank. I didnt use my first buyer status as my friend had already bought previously. I live in the apartment currently and make the full mtg payment monthly. He (my friend/co-owner) is open to explore available options i.e. renting out (we could rent it out for approx €500 more than the mtg payment)/potentially selling and splitting any negative equity - depending on amount).

Fast forward to present day and my partner and I would like to purchase together (both 34). He is a first time buyer and we earn a combined gross salary of €110k per annum. We have combined savings in around 50k. We are in stable employment and both have good credit histories.

I met with my current mtg provider and they couldnt have been more unhelpful. I was told initially the Neg Equity Mtg was an option and then told it wasnt due to the second hirer being different. We were offered a second mtg in the region of €170k - not a runner. No other options available apparently. I've a small personal loan outstanding which will be cleared in the next three months. We have no other debt and all other personal loans/hire purchases in the past repaid without issue. We have arranged additional mtg meetings with other banks but my confidence has been hit.

The only thing I'm reluctant to do is move the full current mtg into my name which seemed like an avenue they wanted to explore.

Any ideas or thoughts would be greatly appreciated. Not my area of expertise.

Thanks in advance.

 

[Brendan Burgess]

The only thing I'm reluctant to do is move the full current mtg into my name which seemed like an avenue they wanted to explore.

Get the apartment and the house into your own name as quickly as possible. That gives you options after that.

While it's in both names, it's much more complicated.

It makes no sense to sell a profitable investment which would leave you both with a shortfall to clear.

Brendan

 

[Mrs Vimes]

I didnt use my first buyer status as my friend had already bought previously.

Just on this point - you did use your first time buyer status, you just didn't see any benefit from it.

 

[RedOnion]

I didnt use my first buyer status

Unfortunately, this is irrelevant as in the eyes of both Revenue and CBI you are no longer a first time buyer.

It's a bit complex - for the bank to accept removal of one party from current mortgage, they will usually want something in return. Like a lump sum payment to take you out of negative equity. Which then means you lose the option of a negative equity mover option and suddenly need 20% deposit.

Your first port of call is to find out if UB will put mortgage in your sole name, allowing you to retain tracker and remain in negative equity.