Moving with Neg Equity

S

southside100

Registered User
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Living in a 1 bed apartment, oustanding mortgage 310k, current value 190k-200k

Have a kid now so we need to move to a larger property as space is becoming a real issue.

I've been in touch with our bank about moving property while in Negative Equity and they basically said that if the banks exposure together with your own outgoings are improved by doing the mortgage then they will definitely consider it.

It may mean a further commute to work but we can deal with that.

My question now is about the deposit for a new property:

- Would the bank let you sell up first and use the proceeds to fund the deposit?
or
- Would you need to come up with the deposit yourself?
 
My understanding is that the financial regulator does not want to allow NE transfers between properties.

Fine Gael’s Banking Strategy, which was released yesterday, has a section about NE solutions, which includes working with the financial regulator in order to allow NE transfers for house owners that want to downgrade. (www finegael2011.com/pdf/Credit_Where_Credit_is_Due.pdf)

It might be wise to wait till the elections have finished to see if the picture has changed
 
Southside,

I have just joined this forum and I had to blink twice as what you wrote ismy exact situation!

I have €312,000 left on a 2 bed apartment, never missed a payment etc but just don't have any room for other child and want a garden(not the priority!) for our son who is two now.

So looking at a house for €310,000, Wife doesn't want to move to far, the banker said I'd need roughly €80,000 savings to move.

No more 100% ortgage, 85% he said so you'd need 15% of your new wanted house. This was before the budget when the stamp duty was the old rules so I guess i could knock €5-10k off the €80,000 but it still means I'm not going anywhere fast!

My apt prob valued at 220-230 if lucky
 
No offense intended darsar, but I think you're dreaming, you'd need 170k to clear the negative equity and have a deposit. Trying to move "up the ladder" while carrying a huge wad of unsecured debt does not seem prudent. You'd probably need to be looking at something under the value of your current place to make this work.
 
Darsar, what Jambo is saying is correct, we were considering trading down so we wouldn't be increasing our mortgage amount. So for example we would sell our apartment for 190k and buy a house for 190k so the terms of our mortgage would remain the same. The only problem we have is finding a deposit.

In your exmaple it seems like you want to Trade Up rather than Trade Down.

I think after everything considered we are going to try to sell and work out a deal to pay the neg equity over 25-30 years and just rent. I can't afford to put my life on hold while this country tries to sort itself out.

Best of luck in the future whatever you decide to do Darsar!
 
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