Negative Equity Trade Up - Experience

Just wondering for those of whom have gone through the negative equity trade up process how much time did the bank give you to find a new house after selling?


The situation i am in is as follows
- In negative equity
- on a tracker
- bank have approved new mortgage taking negative equity and tracker for a short time.
- accepted an offer on our home
- still searching for a new home

So the issue i have run into is that the bank are advising that their mortgage offer is conditional on us signinging contracts for a new house. So they will not release funds to clear the current mortgage unless we have found a new house to go to. Obviously their concern is that they will be left with negative equity without an asset. I have offered to place the funds corresponding to the negative equity on deposit/trust with them to ensure they are not at risk. While this is possible solution they will only give 30 days grace to find somewhere due to fact i am transferring on a tracker.

Now in the current environment sellers will not accept bids unless you are sell agreed - and the buyer of my house will want to move in asap. My plan was to rent for 3-6 months to give us time to find somewhere.

This short timeframe is now making me reconsider moving as either we will end up buying somewhere we don't really want to or the banks will just take the cash and l revoke the offer unless we find something ASAP. This inflexibility is going to ensure I stay put on my tracker.

Anyone else in this situation?

What bank are letting you move and keep you tracker and be in negative equity?

I hope it works out for you but very hard to find the right house in 30 days.

Hi Peno, welcome to the rollercoaster of negative trade ups! My expeirience so far has been this..
Put apt up for sale in May and received close to asking from cash buyer of €121,500. Saw a house for €200,000. We had the 10% deposit for the mortgage so NE of €45k. When we were close to closing sale of apt it emerged the house contracts would not be ready in time so the bank agreed after much negotiation to let us proceed with the sale and release the deeds to new buyer. We sold apt in Oct. We were allowed sell on certain conditions mainly being that we had 12 weeks to complete purchase of house. We also had to lodge €15k into a deposit account which they can absorb back into the NE if we do not go ahead with the purchase, so it's used as collateral. If we do not complete the purchase the remaining €30 will be converted into a personal loan and we will not be in a position to apply for a mortgage for a long time again.
We approached the banks and asked for the 12 weeks timeline and offered €20k collateral, it went to a credit forum in the bank and our solicitor also had to give an undertaking to the bank that he understood the implications of all this.
We are now in the process of drawing down the mortgage, our deadline is up in 3 weeks.. We began that process 2 weeks ago but they lost some of our paperwork and it was only sorted yest! We are with BOI.
Hope this helps

I was not on a tracker, we were on a SVR.

Thanks Laura - interestingly we are dealing with the same bank. It seems they haven't ironed out any concrete rules yet for this yet they openly advertise the possibility. Like yourself I have no problem with lodging the cash while we complete the new purchase. But even 12 weeks is a short time to find somewhere and then complete the purchase.
Fun times ahead.

Yes Peno thankfully we were lucky we had the house picked and our letter of offer on that house. Also app we were one of the first cases back in oct where they allowed a sale of shortfall and then for us to avail of the NE trade up outside the 30 day timeframe. It is a very short timeframe, we already had things in transit luckily enough. I totally understand the stess your going through as I remember that month house searching being incredibly stressful.
Even our branch manager admitted it was all new to them.