Can you move if in negative equity?

[trinity123]

This may be a very silly question but have heard mixed reports of late so thought I would look for clarification. Husband and I bought a three bed semi (first home and only mortgage) in 2005. Mortgage with BOI was for 235,000. In the current climate we would be lucky to achieve 200,000 sale price. We are hoping over the next year or two to get a larger home i.e. upgrade to a four bed house. Is it possible to do this if you are more than likely in negative equity? Some pundits are saying that for second time buyers albeit values of their homes are decreasing, the values of second purchase homes are also decreasing which balances the loss out somewhat. Sounds fine in principle but in reality can you move on if the value of your outstanding mortage is actually more than the sale price of your home? Any advise would be appreciated. I should stress that when means tested in 2005 we borrowed allot less than we could have (thank god!). So basically my question is, is it possible to move up the ladder or must we stay in our present house long term?

 

[mf1]

You cannot complete the sale of your current house unless you are in a position to pay off your entire mortgage ( for instance with sale proceeds, loan from someone else? and/or savings) OR unless the bank are willing to roll up the negative part/outstanding balance of the mortgage into a new mortgage.

So, I suppose you could go talk to your bank and see what they say. I suspect their view would be that if you do not have any savings to discharge the balance of the mortgage that you probably do not have 8-20% of the purchase price of the next property.

Can you chip away at the outstanding mortgage to bring it down?

mf