Negative Equity - want to extend

M

Mackemdub

Registered User
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hi

I realise that the obvious answer is 'talk to your bank' but i just wanted to sound out opinions here first.

summary of current position:

  • we have a 25yr term from 2008 with Haven.
  • c.€520k remaining on a 3bed SD in cabinteely
  • realistic house value €350-400k
  • no arrears (current or historic) and timely payment of mortgage
  • currently on fixed rate until next april
We need to extend, full specs etc not done up yet but likely cost €60-100k depending on what we aim for.

We would look to put in some equity to do this (likely c.€40k) but, whatever the cost, will need some additonal funding.

has anyone experience of lenders providing additional funding for performing (in terms of payment) mortgages?

many thanks for any assistance.
 
Haven do negative equity trade-up mortgages, so they might. They seem very rare and I suspect that your salary would have to very high. If your salary is that high, maybe you could defer the extension and save up the difference?

Make sure that you are not entitled to a tracker on expiry of the fixed rate, just in case a new mortgage would cause you to lose it.
 
thanks for the reply Brendan.

joint net income is about €6.1k/mth (only recently increased from about €5k) - mortgage after TRS is about €2.7k with no other debt/loans. Childcare €1k and the rest 'usual' bills - have only just got back to a position where we can put a little aside as savings. the €40k equity for extending would be our current savings. baby no 2 due early next year, hence the want to extend.

Pretty sure there's no tracker - we were'nt offered one at the outset and this is our second fixed rate, i believe when we re-fixed Haven had said we would have reverted to their SVR.

thanks again
 
net income|€6.1|
Mortgage|€2.7| 44% of net income
Childcare|€1k
left over|€2.4k

I think you should put off the idea of extending your house. Your repayments are way too high a portion of your current income.

What happens if interest rates rise?

What happens if your income falls?

Your child care costs will rise as well!

You should look at using your savings to pay down your mortgage if the penalty for early repayment of a fixed rate is not too high.

You are far better off being financially comfortable in a small house than being in arrears on a bigger house.

Brendan
 
Brendan, many thanks for the input. i think for now we may just have to look at a lower cost solution for reconfiguring the current house to make it more livable.
 
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