negative equity mortgage?

[Lainey]

Is it possible for us to get a negative equity mortgage or any other advice.

We still owe 200k on our house (negative equity of approx 90/100k). Approx shortfall of 100k. Monthly repayments: 800

House we want to buy is 120k.

I have a permanent public sector job with a salary of 30k. Partner is unemployed and claiming SW. We have 1 child.

No other loans or debts. Never missed a mortgage payment.

Any advice or guidance welcome. Thanks

 

[SlinkyL]

I spoke to the bank this week regarding getting finance to renovate my 2 bed former corpo house as our family of 5 has outgrown it and it is becoming increasingly intolerable as a living situation. The outstanding mortgage = 267k house value approx 180k (on a good day) Neg Eq = 87k.

We have a tracker, never missed payment and save approx 600e per month so could afford to pay more. Also no other debts, no loans whatsoever, husband earns 60k, I am not working currently but a qualified teacher. Our house is a side house and does have potential for renovation. The bank dismssed the request as it would mean increasing Loan to value ratio and put them in a worse position if we couldn't meet repayments in furture - annoying but fair enough. Our current montly mortgage repayment is 900 on 1.5% tracker over 27 years.

Instead they offered me a neg eq mortgage. This will make you laugh....
Based on current earnings, they could offer us a new mortgage of 290k. When we pay off the negative equity to the bank we are left with about 200k to buy new house (in dublin this won't get us anything much better than our current home). Our new interest rate is 6.8%!!! and monthly repayments of 1800!!!!!. So essentially we gain an extra 20k to buy a new tiny house and double our mortgage repayments for the next 30 years!!! It's a joke.... seriously you would need to be very very foolish to go for something like this. I think it's a disgrace that it is even being offered...
This was with AIB btw. Would be interested to hear of any other Neg eq offers out there..
I think we are now going to try and increase our savings and try to get large CU loan to do our renovations. It has really made me realise that we need to hold on to our tracker... although we paid above the odds for our house, were we to buy in the current market, we would be hammered with interest rates - seems like its a lose lose for the average hard working person, very frustrating situation to be in..

 

[Lainey]

Well spoke with mortgage advisor and she said we have no hope at all for a negative equity mortgage I asked her had she any options and she is going to check out if bank would allow us to sell house and turn negative equity into a secured loan. Rough figures say €90k over 25 years - repayments approx €500 monthly, however if we continued to pay what we are paying now €800 per month for say 2 or 3 years that should bring loan down a good bit and hopefully by then husband will have a job and we could remortgage my parents home for €120k. I have absolutely no clue of any of this and would need to get advice on it (well thats if bank allow us to do this) or if it is the right thing to do.

SlinkyL - That is absolute madness that for an extra 20k u would have to pay an extra €900 per month over 30 years..............!!!!!!