Negative equity help

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Dadx3

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Hello,

My wife and I purchased a small 1 bed apartment in Dublin last year to get on the property ladder so we wouldn't be left out in the cold as prices were increasing so fast. We have recently learned my wife is pregnant with triplets and our apartment is way way way too small so we want to sell it and move into something larger. I had our apartment appraised and it came in at 20K less then I paid for it, I have spoken to 2 different EA's and have been told I am very very unlikely to even get what the appraiser said it was worth. We took out a 100% loan and have paid almost nothing on it so basically we are completely screwed. Can some friendly unbiased soul clarify some things for me.

If I sell the house at 20K less then the value of the loan, how is that 20k treated. As the security is gone do I have to pay it immediately?

If I rent the house, the returns will currently not cover the cost of a interest only mortgage, but if rents keep on increasing I might barely break even (assuming no more interest increases). However, if i do this I seriously risk further price decreases wiping me out.

If I do sell the house, a co-worker said something about getting a unsecured credit union loan to cover the defecit, and these loans are 'hidden' from the banks so I would be able to buy another house if the opportunity arose. (As I am not insane, I will be renting in the immediate future, but I still want the option). Is this true and does anyone have an idea of how much my wife and I could get? (We have a combined income of 120K per year).

Not that I am seriously considering it, but what exactly are the repercussions of walking away from the apartment?


Thank you in advance for any advice.
 

CCOVICH

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Dadx3 (also known as Diatom, here on AAM, and on thepropertypin) banned for trolling.
 
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