Negative equity mortgage with Ulster Bank

M

muffin1973

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Hi all

We met with the mortgage mover sales people from Ulster Bank a few months ago and started the process of selling our house (currently in negative equity) and attempting to find and buy another house to move to.

We had to apply for this negative equity mortgage with a particular house in mind. We have now been unable to secure that house and have been told we need to reapply for the mortgage with a new house in mind.

The bank has told us we need to sell our house/buy a new house at the same time which I understand to mean completing the sale and purchase at the same time. The sales person keeps using the word "simultaneously". I appreciate we will need to clear the first mortgage (excl. the neg equity) and move the negative equity from that first mortgage to a new one. But I'm not sure how feasible this is, given the selling/buying property process in Ireland. Our solicitor says it's basically not possible to close on a sale and a purchase on the same day. He said he closed one recently where the bank involved was AIB and his clients were given 3 months between closing on their sale and then closing on a subsequent purchase.

My question is has anyone managed this negative equity mortgage through Ulster Bank and if so, was there any grace period given between closing a sale and purchase?

thanks

M
 
Not with Ulster Bank but I had those exact same queries with KBC 2 years ago when I sold my house. How is it possible to sell your home and buy the next simultaneously? It's not.

I sold my property for a cash offer above the valuation they carried out with the intent of buying another property. The sale part all went through and house was sold as normal. The negative equity of 55k was then leftover as RMB (Residual Mortgage Balance) where I continued to pay this off monthly under the same mortgage rate etc albeit much lower repayments based on the reduced amount leftover (RMB), until I came to draw down new mortgage then this would be combined as one into the new.

The purchase fell through on the new property so almost 2 years later I still have the RMB repayments. I've had solicitors and other people in that realm tell me to " feck the banks, the amount outstanding is unsecured and they have nothing to take off me if i don't pay it back". Though I have not much left over with the costs of kids and living etc , I can afford to pay it so I'm not going down that long painful route of trying to default on it, or get it written off, as lovely as that would be. I'd imagine it would be a long hard road to try prove no quality of life etc. Also, I want another mortgage for the next house, I can imagine a write off would blot that.

Anyway back on point. Don't stress over syncing the buy and sell. They will just get you to sign an RMB agreement to promise to pay the leftover negative equity.
 
Thanks so much for your reply, petiteverdot, I really appreciate it.

They've never mentioned a RMB agreement, but I wonder is it possible to sell the house anyway, complete on it, and then they'll be forced to put that in place? I'm still hoping if we manage to go sale agreed on something soon that we may pull it off, but even so, it won't be on the same day! I don't know why they bother offering such a possibility if it's actually not possible to do! Are you still able to take them up on the negative equity mortgage if you find somewhere, as you're still in neg equity?

M
 
muffin1973 said:
Thanks so much for your reply, petiteverdot, I really appreciate it.

They've never mentioned a RMB agreement, but I wonder is it possible to sell the house anyway, complete on it, and then they'll be forced to put that in place? I'm still hoping if we manage to go sale agreed on something soon that we may pull it off, but even so, it won't be on the same day! I don't know why they bother offering such a possibility if it's actually not possible to do! Are you still able to take them up on the negative equity mortgage if you find somewhere, as you're still in neg equity?

M
Click to expand...

They got me to sign the RMB agreement when I was selling the property.

The probably say you must sell and buy to strop people selling and then being in an unsecured circumstance like mine. i.e. i owe the 50k but theres no collateral i.e. i don't have a house they can take back if i stopped paying in the morning.

I am still paying off the negative equity, just like a normal mortgage. I have approval for a new mortgage for whenever the new house comes along (lasts 6months so i have to renew this each half year). Renting at the moment. It is in the interest to offer me a new mortgage, lump on the negative equity into it as then they have me back out of the unsecured scenario.
 
Yeah, they haven't asked us to sign anything like that ... and we can't get a straight answer out of them as to whether they would allow us a certain amount of time between closing on our sale and a subsequent purchase.

That's their point - we are not allowed complete without having another mortgage to move the neg equity to....that RMB would have given us a bit of breathing space. I'm worried sick as to how we're supposed to try and do this simultaneously but we have to try it as it's our only way of moving on.

We have to reapply for the mortgage every time we don't get the house we applied for the mortgage for - our last mortgage application only went in in October, but as we didn't get the house we were bidding on we have to start all over again. Very frustrating. It's in UB's interest for this to happen for us too as we are on an amazing tracker rate and they are making no money off us as it stands.
 
we are not allowed complete without having another mortgage to move the neg equity to.

We had an approval in principle (AIP) lined up for the new house that fell through. Technically it's not having a mortgage until you draw it down and get the "loan pack" as they called it. Maybe if you find a house, get AIP, they have to let you sell yours before you can buy next. These transactions take months, and solicitors love that. These transactions do not happen on the same day, week.. lucky if they fall in same month. I dealt with KBC by email and phone. I'd email them constantly chasing it up.. every day.. it's soul destroying but chase it until you get an answer. If you get an offer tell them it;s not there forever and if it's a good enough offer they may take it.

I don't know what Ulster Bank are like but i'd imagine similar.

Note: we had to get a valuation from the bank before we could sell, with their nominated estate agent. The offer we got was about 20k above that valuation so they took it. I'd imagine if it was under it might be a different story. Don't sit and wait, stay in touch with them every 3 days. I found the email a good avenue, they can see previous emails, everything in writing from them. Too easy to verbally fob off on the long finger by phone.
 
Hi Petiteverdot,

yes, we have an AIP letter as well, not worth the paper it's written on it would seem! Our own house sale seems to be going fine, so it's more a question of finding another house - there isn't much out there, typical for this time of year. I've spoken to another guy in the bank today to clarify how 'simultaneous' the closing actually has to be!!!

you're not wrong, it's incredibly soul destroying....
 
muffin1973 said:
Hi Petiteverdot,

yes, we have an AIP letter as well, not worth the paper it's written on it would seem! Our own house sale seems to be going fine, so it's more a question of finding another house - there isn't much out there, typical for this time of year. I've spoken to another guy in the bank today to clarify how 'simultaneous' the closing actually has to be!!!

you're not wrong, it's incredibly soul destroying....
Click to expand...

Though it may feel like you have to with this simultaneous nonsense they look for, don't rush into buying a house that you don't want just because you feel squeezed by the banks. Easy for me to say I know but you don't want to end up in the same position down the line and trying to move out of somewhere you don't want.
 
You're so right, my husband thinks we should just buy anything, but I really don't want this same situation in a few years time...
 
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