Negative Equity So Confused

S

Shelly150

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Hi I really want to sell my house and move into the town (I currently leave in a village) but my house is in negative equity. My mortgage provider is KBC and have told me that I can trade up with a negative equity trade up mortgage but this 125% LTV really has me scratching my head!

The mkt value of my home is about 155000 which leaves me with about 76000 worth of neg equity.

They have told me that to get the LTV ratio at 125% I should be looking at property selling at about 210k. But I have seen a property I like for about 180k where does this leave me?

I have about 30k in savings should l use that to pay more of a deposit? Should I be looking at a dearer house which would leave me paying more of a mortgage? (My mortgage is a tracker rate so I will have some at the increased tracker rate and d rest at a variable rate?)

Should I use my savings to pay a lump sum off the mortgage instead? Pay more myself for the 180k house?

As you can see very confusing!
 
Paying more for the 180k is not a good idea.
Also you will need at least a 10% deposit for the new NE mortgage so bear this in mind when thinking about paying off lump sum from existing mortgage.
Appears to me that you need a NE mortgage for 256K - 25,600k deposit for a total of 230,400. If my calculations are correct would that be a LTV of 128%
 
Shelly ;
Is the following correct?

1. Mortgage = k221 .
2. House will sell for K 155.
3. You have a loss k76 {ie negative equity}.

Today you are down k76.

KBC have calculated that they can cover you for a house costing k 210, on the assumption 1+2+3 are correct.

Since you maybe buying @ less than k210 you are able to buy house @k180 without hitting their max loan of 125% ie up to k210..

Since some of the new debt will be dearer Variable ,I would be inclined (subject to your own circumstances) to pay more of a deposit.

But if I am correct you can go for a home up to max k210 , luckily you have spotted one @ k180.

So good luck.
 
Hi Gerry, your figures are spot on, but if the house is 180k does that leave my LTV over 125%?

I'm not really sure how the figure is calculated is it 1800000-18000(deposit)+76000neg equity divided by 1800000 new house price ?
 
Nope,

From what I see if you bought a house @ k210 that is the max 125% LTV you would be allowed to borrow.

So if you bought @ K180 ,you are k30 below that 125% maximum.
That leaves you ok and gives you wriggle room as per Random s post.

If you can phone or preferably call into KBC they will explain.
(most banks assume we know what they talk about ! on LTv %,s etc , etc.)
 
Thanks Gerry and Random I didn't fancy haven't to go for a dearer mortgage considering they are going to add over 1% to my tracker rate.

I did ring them and the person I was talking to on the phone did lead me to believe that any house value below 210k would mean I would have to pay more of the house price myself. That's why I was so confused.

I think they have a branch in swords so will spin up and pay them a visit.
 
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