Negotiating with KBC re moving house with neg equity

kcat

Registered User
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Like so many others, my family are in trying to emerge from the negative equity nightmare and we are trying to put together a plan to do sell our current home and move to a larger family home.

Some background:
Current house value: ~€180k hoping this will increase to €200k in the coming year as prices in our neighbourhood do seem to be rising.
Mortgage outstanding: €280k
Mortgage & Rate: Tracker at 1.75%
Bank: KBC

Current combined income: €97k
Job Status: Permanent public servants
Savings: €55k
Save €1000/month
Dependents: 1yr old although we would like a second shortly

Assuming, we sold the house for 200k, we would have a shortfall of 80k. Using our savings to reduce this would see us requesting from KBC permission to carry 25k to another mortgage. We have seen other houses in the Kildare area for around 300k. I would like the opinion of those more knowledgeable of mortgages and negative equity as to whether it is worth initiating a conversation with KBC yet or is selling and buying a new home a bit of a pipe dream?

Many thanks. If I’ve missed any important data, please let me know and I will update.
 
I have done a Key Post on the KBC tracker mover here

Analysis of KBC tracker mover mortgage

They allow you to move your tracker, but charge you an additional 1.25%. They allow you to keep this rate for the full remaining term of the mortgage, unlike Bank of Ireland and Ulster Bank who allow borrowers to keep the tracker for only 5 years.


This is how it will work for you:

Sale of house|€200k
Mortgage|€280k
Shortfall|€80k
Cost of new house|€300k
Total required|€380k
Transfer tracker @+1.25%|€280k
Savings |€55k
New mortgage @SVR |€45k
Total borrowings|€325k
On a salary of €97k , you should easily qualify for a €325k mortgage from KBC.

Loan to value: 108% ( €325k/€300k ) well within the maximum LTV of 125%

You should also read this thread
Maximising your chances of getting a tracker mover product in the future

The main thing you should do now, is to move your current account to KBC.

If you go ahead with it, please keep a diary, and let us know the result, as it will be helpful to others.
 
Many thanks as always Brendan. I've just looked at the key post, thanks for directing me to it.

I will update back here if/when we manage to move.

Can I just ask two questions?
1. Was there recent questions as to whether KBC would continue to try maintain/increase their foothold in the current account market? Would you still recommend moving our current account to KBC?
2. In my previous email, I didn't reference legal costs, estate agents and stamp duty. Are we to pay such costs from our current savings i.e. considerably increasing the new mortgage which would be taken on a SVR?
 
Please be very careful that your house is sold before you buy. And beware of gazumping, I've a feeling it's back in the market based on the price rises and lack of supply.
 
Thanks Bronte. We're not quite ready to sell yet but I want to be aware of all our options and then make an informed decision; it was jumping on a bandwagon that got us into our current financial mess.
 
It's very difficult Kcat in a rising market to call it right on selling price, while buying wrong due to pressure on prices.
 
1. Was there recent questions as to whether KBC would continue to try maintain/increase their foothold in the current account market? Would you still recommend moving our current account to KBC?

KBC reduces mortgage rate by 0.2% for current account customers

They are hungry for mortgage business and current account customers.

They will feel more comfortable lending to you if they have a good look at your financial record.


2. In my previous email, I didn't reference legal costs, estate agents and stamp duty. Are we to pay such costs from our current savings i.e. considerably increasing the new mortgage which would be taken on a SVR?

Yes. But you will still be well within the maximum LTV.

You should probably apply now for the tracker mover product as it may take some time to approve. Then you will know how much you can borrow and will be able to move fairly quickly.

You will have to sell your own home first, but it's easier to sell now, than to buy.

Brendan
 
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