Negative Equity - What is possibility of moving house?

Z

Zebrano

Registered User
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Personal and income details
Net (i.e. after tax) Income self: public servant €3,300 net per month
Income history: Permanent
Net income partner/spouse: Private sector €2,200 net per month from employment.
Income history: Permanent, but also self employed weekend business that is currently not earning any income from (break-even) so hoping to close that down soon.
number of children: None


Home loan
Lender: EBS
Amount outstanding: €219k
Value of home: c€100k, may get a little bit more because it is in good shape and has been extended
Interest rate: SVR 4.58%
Monthly repayment : €978
Amount in arrears : 0 and have never been in arrears

No discussions with the bank at this stage


Other loans and creditors - delete those which don't apply to you
No other loans, just the mortgage.

Other savings and investments
c€30k in savings. Save approx. €800 per month, spent a heap of the savings on our recent wedding and had to buy a new car, so we have 30k left after that.


What is your preferred realistic outcome?
I am just looking for some advice re our chances of actually moving house, given that we are in negative equity of c120k. Do you think EBS would allow us to take out another mortgage, sell our current home and transfer the negative equity? There is no major panic for us to move, our mortgage repayments are affordable and our house is big enough, however we would like to move to a nicer neighbourhood. If you think our chances are slim to none, should we begin to pay extra off the mortgage to reduce the term? Currently the mortgage will end in 2042 so we have 29 years left. I don’t really have an appetite to pay a lump sum off the mortgage as I would rather keep the 30k in savings just in case we come into difficulty in the future, but would have the capacity to pay a little extra each month. What do you think? Let me know if you need any more information. Thank you and I appreciate any responses I receive.
 
I would pay as much extra as possible off the mortgage for a couple of years.

This will achieve two things:

a) Reduce your negative equity and

b) Show the bank you are capable of paying back larger amounts on a monthly basis.

This should put you in a much better bargaining position with regard to carrying over whatever negative equity is left.
 
Thank you callybags, so would you think our chances at the moment are slim to none. I just do not want to approach the bank if we have no hope. We can definitely do that for a couple of years and re-evaluate then.

Really appreciate your feedback.
 
Brilliant thanks MajorM, I will go with callybags and see what I can reduce it by over the next couple of years. Thanks for the help guys!
 
My Wife and I are with PTSB and our circumstances are much the same as yours, plus we have a baby daughter. Our outstanding mortgage amount is €217k, house worth €100k. They gave us approval in principle to sell the house and carry the negative equity. They approved us for a total of €300k, so we could look at houses in the 200k price range.

Arrange an appointment and see what your bank says. I went into the meeting expecting them to laugh at us! So we were surprised to hear that not only would they agree to the sale, but to approve us for a larger amount.
 
Thank you Bill Struth. It is hopeful to know that my case could be considered - and I am so happy that you have been given approval. I have yet to contact the bank, but might overpay for the next year and then apply when I have a larger deposit. Thanks again for sharing and the best of luck with the house search :)
 
Quick follow on question, please?

Does it matter to a bank when assessing a mortgage application the length of time you have been in permanent employment? I am kind of thinking about moving jobs, from a permanent position to another permanent position (havent gone for interviews or anything - just thinking about it), but if it would impact approval I will stay put.

Any thoughts/experience?

To update on the below, we have been paying an extra €300 per month now since August, and still maintaining our level of savings.
 
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