Want to sell in negative equity and buy another property

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guerngirl

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Person owns a house bought 2007 for 585000 and is now worth at best 325000. 80000 is paid off on house leaving debt of 505000. Wants to move to a new house priced between 350000 and 400000. Current house is on tracker.
1. Would person lose tracker if they sold current house to buy another?
2. Is it even possible to get a new mortgage now by carrying the negative equity - eg sell for 300000 therefore 195000 negative equity would have to be carried.
I think this person has no real option at the moment and us trapped in current location until Market seriously picks up but am I wrong? I believe boi are offering negative equity mortgages but I assume terms are very strict.

Both owners ard in fulltime permanent employment with no debts other than mortgage and perfect credit history

Thank you
 
Deals like this are being done, but it's very much at the discretion of the lender. It would probably work like this: -

  • Mortgage 90% on new house - say €360,000 mortgage on €400,000 house. Borrowers would need to have €40,000 deposit saved plus legal costs.
  • Carry €195,000 negative equity - depending on which lender, this might be carried as an unsecured loan or added to the mortgage, making it a €555,000 mortgage.
They would want to qualify comfortably for a €555,000 mortgage and have plenty of savings.

As I say, such deals are entirely at the discretion of their lender so the only way to know for sure if they would qualify is to ask.
 
1. Would person lose tracker if they sold current house to buy another?
Click to expand...

Yes, unless it's Ulster Bank which is allowing customers to transfer their trackers. Not sure though if they are allowing negative equity mortgages though.
 
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