Negtive Equity and all that
Discussion
Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
w
eLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
you won't be on your own (not that thats much conselation)Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
I would say that Zoopla is far from perfect in its methodology of attributing values
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
you cant sell a house without clearing the mortgage, so you'll either have to add some money to it, sell it for more, or not sell.Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
ps, you wont get another mortgage without a substantial deposit either
^^What he said.
Zoopla is completely flawed. Applying a blanket percentage drop to all properties is ridiculous. The market is so distorted right now largely because so few properties are for sale. I guess there must be a disproportionate number of distressed sales as well which further distort the data.
Zoopla is completely flawed. Applying a blanket percentage drop to all properties is ridiculous. The market is so distorted right now largely because so few properties are for sale. I guess there must be a disproportionate number of distressed sales as well which further distort the data.
Tony*T3 said:
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
you cant sell a house without clearing the mortgage, so you'll either have to add some money to it, sell it for more, or not sell.Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
ps, you wont get another mortgage without a substantial deposit either
That would effectivly give you a (for example) 150% mortgage. Not gonna happen im afraid.
Best bet is to rent if you can get someone in at a price to pay make your mortgage payments.
On the positive side, you could see it as expanding your property portfolio. Even though you are down on your current property. the one you will buy will also be down.
Let assume a recovery in the next five / ten years. You will have two properties both appreciating in value. And as long as someone is in the first one (and not left dormant for any period) you wont actually loose anything at all.
Good luck!
Best bet is to rent if you can get someone in at a price to pay make your mortgage payments.
On the positive side, you could see it as expanding your property portfolio. Even though you are down on your current property. the one you will buy will also be down.
Let assume a recovery in the next five / ten years. You will have two properties both appreciating in value. And as long as someone is in the first one (and not left dormant for any period) you wont actually loose anything at all.
Good luck!
EdJ said:
^^What he said.
Zoopla is completely flawed. Applying a blanket percentage drop to all properties is ridiculous. The market is so distorted right now largely because so few properties are for sale. I guess there must be a disproportionate number of distressed sales as well which further distort the data.
Yeah, but it sounds great when the media like to report that we are all screwed - I mean, for the hard-of-thinking its nice and easy to say 10%, 25% or 50% drop in house prices... Zoopla is completely flawed. Applying a blanket percentage drop to all properties is ridiculous. The market is so distorted right now largely because so few properties are for sale. I guess there must be a disproportionate number of distressed sales as well which further distort the data.
Of course, its not as simple as that, but that has never stopped anyone in the past and unlikely to do so now.
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
Did you put up a deposit when you purchased or was in 100%?Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
E.G If you put up say 20k deposit then the mortgage should only be for 130k leaving you with a shortfall of 7k to repay to the lender.
silver.fox.2008 said:
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
Did you put up a deposit when you purchased or was in 100%?Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
E.G If you put up say 20k deposit then the mortgage should only be for 130k leaving you with a shortfall of 7k to repay to the lender.
Two comments:
1. A quick poke around on Zoopla makes me wonder where they get their numbers from. Putting the output of a random number generator on screen doesn't a house-valuations-site make, methinks.
2. What does it matter? You're living in a house. You're paying the mortgage. The value of your house only matters if you want to buy it or sell it. You want to do neither. Therefore don't worry about it.
Oli.
1. A quick poke around on Zoopla makes me wonder where they get their numbers from. Putting the output of a random number generator on screen doesn't a house-valuations-site make, methinks.
2. What does it matter? You're living in a house. You're paying the mortgage. The value of your house only matters if you want to buy it or sell it. You want to do neither. Therefore don't worry about it.
Oli.
Back in the 90's when house prices were dropping I had to sell my house due to the wife leaving. We bought just before prices dropped so the house was now worth £10k less than the mortgage amount. Because of my financial situation (wife was main earner) I couldn't afford to pay the full mortgage amount so the Halifax took a reduced amount.
We eventually found a buyer but the Halifax blocked the sale due to the offer being less than the mortgage although it was market value. At the same time the Halifax were saying that either I started paying the full mortgage or they would reposses!
We had to start legal proceedings aginst the Halifax before they backed down and allowed the sale - although by this time the buyer had got fed up and pulled out. We actually had a date for a hearing at the Old Bailey which would have been interesting!
Both myself and the wife were both jointly and individually liable for the loss on the mortgage - so my wife "vanished" and the Halifax then chased me for the £10k. In the end my Mum put up £5k on the agreement that Halifax didn't chase me for the remainder or I would pay them back at £1 a month. They chose the £5k and as far as I know the wife never paid anything.
We eventually found a buyer but the Halifax blocked the sale due to the offer being less than the mortgage although it was market value. At the same time the Halifax were saying that either I started paying the full mortgage or they would reposses!
We had to start legal proceedings aginst the Halifax before they backed down and allowed the sale - although by this time the buyer had got fed up and pulled out. We actually had a date for a hearing at the Old Bailey which would have been interesting!
Both myself and the wife were both jointly and individually liable for the loss on the mortgage - so my wife "vanished" and the Halifax then chased me for the £10k. In the end my Mum put up £5k on the agreement that Halifax didn't chase me for the remainder or I would pay them back at £1 a month. They chose the £5k and as far as I know the wife never paid anything.
weLex said:
eLex said:silver.fox.2008 said:
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
Did you put up a deposit when you purchased or was in 100%?Which means we're in negative equity, so what does that mean if we were to sell the place?
Would the outstanding debt from the mortgage just be put onto any new deal that we tried for or would we have to stump up the 20k outstanding before doing anything else?
We're not looking to move for a least a year or so.
It's my thinking to just rent the place out as I dont think the prices will recover in time.
E.G If you put up say 20k deposit then the mortgage should only be for 130k leaving you with a shortfall of 7k to repay to the lender.
You either need to stay put for another year or two and see what happens, or rent your out and rent elsewhere.
You are not in a position to buy another property at the moment as far as I can see.
But as others have noted, there are going to be millions more in the same boat, so in time the banks are going to have to change their current lending criteria so sit tight for a bit.
I would also add, we were thinking of moving this year, but will probably wait a year and see what happens with the market - it is too uncertain at the moment, and we have plenty of equity.
Edited by AlexKP on Thursday 19th March 12:17
Chim Chim said:
Back in the 90's when house prices were dropping I had to sell my house due to the wife leaving. We bought just before prices dropped so the house was now worth £10k less than the mortgage amount. Because of my financial situation (wife was main earner) I couldn't afford to pay the full mortgage amount so the Halifax took a reduced amount.
We eventually found a buyer but the Halifax blocked the sale due to the offer being less than the mortgage although it was market value. At the same time the Halifax were saying that either I started paying the full mortgage or they would reposses!
We had to start legal proceedings aginst the Halifax before they backed down and allowed the sale - although by this time the buyer had got fed up and pulled out. We actually had a date for a hearing at the Old Bailey which would have been interesting!
Both myself and the wife were both jointly and individually liable for the loss on the mortgage - so my wife "vanished" and the Halifax then chased me for the £10k. In the end my Mum put up £5k on the agreement that Halifax didn't chase me for the remainder or I would pay them back at £1 a month. They chose the £5k and as far as I know the wife never paid anything.
Yowzers.... nasty. Shame you had to get legal on them, but good for you for standing your ground. We eventually found a buyer but the Halifax blocked the sale due to the offer being less than the mortgage although it was market value. At the same time the Halifax were saying that either I started paying the full mortgage or they would reposses!
We had to start legal proceedings aginst the Halifax before they backed down and allowed the sale - although by this time the buyer had got fed up and pulled out. We actually had a date for a hearing at the Old Bailey which would have been interesting!
Both myself and the wife were both jointly and individually liable for the loss on the mortgage - so my wife "vanished" and the Halifax then chased me for the £10k. In the end my Mum put up £5k on the agreement that Halifax didn't chase me for the remainder or I would pay them back at £1 a month. They chose the £5k and as far as I know the wife never paid anything.
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
1. Who knows how prices will be in 1 year.2. A website is not a market rate
3. If you really do need to know now, get three estate agents round to value it.
NoelWatson said:
anonymous said:
[redacted]
To what?If there are no new buyers, then the entire system grinds quite quickly to a halt, as has happened.
Jasandjules said:
weLex said:
eLex said: Going by a randon propery valuation website (zoopla) it would appear that our place is now worth substantially less than when we bought it (no shock there) but its down from £150k to £122k, a large loss.
1. Who knows how prices will be in 1 year.2. A website is not a market rate
3. If you really do need to know now, get three estate agents round to value it.
Have a look at local asking prices, have a word with local agents.
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