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Dorothy.7
Starting Member
9 Posts |
 Posted - 30 August 2010 : 21:13:30
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Drowing in negative equity - worried sick
In 2007 my partner who is now my husband and I were living separately in owner occupied home and decided to buy a joint home with the intention of selling our old homes. Our new home cost £330k and we needed to move on sale and it was last one in area we wanted to live in. Our respective homes in 2007 were valued at £250k (mortgage of £70k) and £160k (mortgage of £73k). As we had to move quickly on sale we used equity in existing homes for new home with intention of getting quick sales on our old homes ASAP so we bought our joint home for £330k with interest only mortgage of £236k with intention of moving onto repayment mortgage when our house sales came through and then the PROPERTY CRASH HAPPENED!. Several sales fell through on my old property and I eventually sold for £150k 1 year later. I only made £7k profit! My husband's old home is rented and is now in £50k negative equity. Our current home which was bought for £330k in 2007 is now worth £210k and we are £26k in negative equity. To make matters worse our interest only mortgage is on a fixed rate of 6.38%. We are both in secure jobs with joint gross income of £70k and have no other debts than the combined mortagees on both properties of £376k. My husband's old property is rented out for £350 per month which covers the interest only mortgage on it. If interest rates increase to levels beyond 7% we will not be be able to sustain our mortgage payments. Is bankrupty an option? |
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debtinfo
forum expert
2826 Posts |
Posted - 30 August 2010 : 21:42:42
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Im sorry but those numbers dont really stack up. To fall from £330K to £210K doesent really sound right.
Also you have gone from £267K equity to £76K negative equity, surely not all of that money could have dissapeared in the house price crash, that would be anaverage fall over the 3 houses of 50% |
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Dorothy.7
Starting Member
9 Posts |
Posted - 30 August 2010 : 22:11:47
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quote:
Originally posted by debtinfo
Im sorry but those numbers dont really stack up. To fall from £330K to £210K doesent really sound right.
Also you have gone from £267K equity to £76K negative equity, surely not all of that money could have dissapeared in the house price crash, that would be anaverage fall over the 3 houses of 50%
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Dorothy.7
Starting Member
9 Posts |
Posted - 30 August 2010 : 22:13:12
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That's exactly how the figures add up. I live in Northern Ireland which probably has suffered greatest drop in property prices. Devastating when I simply wanted to move house.
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debtinfo
forum expert
2826 Posts |
Posted - 30 August 2010 : 22:18:27
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would it be just you or both that would be looking to go bankrupt
BTW make sure that you mention the NI bit in your posts as the rules are slightly different over there, so i am going to bow out as i couldnt be certain with an answer, There is a poster Golf88 that is currently doing bankruptcy in NI so you could look at a few of his posts |
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Dorothy.7
Starting Member
9 Posts |
Posted - 30 August 2010 : 22:33:53
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quote:
Originally posted by debtinfo
would it be just you or both that would be looking to go bankrupt
BTW make sure that you mention the NI bit in your posts as the rules are slightly different over there, so i am going to bow out as i couldnt be certain with an answer, There is a poster Golf88 that is currently doing bankruptcy in NI so you could look at a few of his posts
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Dorothy.7
Starting Member
9 Posts |
Posted - 30 August 2010 : 22:36:28
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Our family home is a joint mortgage of £236k and my husband's previous home with mortgage of £140k also in negative equity is just in his name. Thought we would both have to go bankrupt? Is there an option for only him to go bankrupt as second home is in his name? Would we have to be repossessed first?
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RHB
Senior Member
1159 Posts |
Posted - 31 August 2010 : 08:58:53
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| I can see where debt info is confused as the figures have changed since the first posting where you said the mortgage on your husbands home was 73k. What is it now worth? How long is the fixed rate for? At the moment interest rates are very low & I doubt they will rush up to7% over night. Could you live in your husbands former home if needs be? |
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Dorothy.7
Starting Member
9 Posts |
Posted - 31 August 2010 : 09:54:32
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quote:
Originally posted by RHB
I can see where debt info is confused as the figures have changed since the first posting where you said the mortgage on your husbands home was 73k. What is it now worth? How long is the fixed rate for? At the moment interest rates are very low & I doubt they will rush up to7% over night. Could you live in your husbands former home if needs be?
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Dorothy.7
Starting Member
9 Posts |
Posted - 31 August 2010 : 10:02:28
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Interest only mortgage on my husbands home of £140k. In 2007 mortgage was £73k but we increased it to raise equity for our joint home. My husband's former home now valued at 80-90K. Its a 2 bed terrace. Rented out for £350 p.m. Fortunately its a tracker with Santander so getting to avail of low interest rate. Our joint home mortgage is £236k interest only with Nationwide on fixed rate of 6.38% which comes to an end in Nov 10 when we will revert to base rate which Nationwide have at just over 2%. Mortgage payment on joint home will go from £1256 to about £500 in Nov. Im planning to try to overpay mortgage by £500 per month as long as low interest rate holds. We cant live in my husbands former home as it is too far away from the children's schools and our work etc.
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RHB
Senior Member
1159 Posts |
Posted - 31 August 2010 : 18:58:14
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| I wouldn't panic then, cos you will benefit from the low interest rates for a while. |
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coolchick27
Starting Member
1 Posts |
Posted - 08 September 2010 : 16:53:06
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| Dorothy, going through Husbands NI Bankruptcy, we had 3 properties, from what you say BR for your husband is an option as you can keep your home if you can maintain the payments, if it is in negative equity the OR may hold it for 3 years before dealing with it but as long as you pay the mortgage the mortgage lender doesnt care that he is BR. |
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Dorothy.7
Starting Member
9 Posts |
Posted - 08 September 2010 : 17:09:58
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quote:
Originally posted by coolchick27
Dorothy, going through Husbands NI Bankruptcy, we had 3 properties, from what you say BR for your husband is an option as you can keep your home if you can maintain the payments, if it is in negative equity the OR may hold it for 3 years before dealing with it but as long as you pay the mortgage the mortgage lender doesnt care that he is BR.
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Dorothy.7
Starting Member
9 Posts |
Posted - 08 September 2010 : 17:12:46
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I contacted a mortgage provider last week who valued our joint home through land and registry at £180k. That a massive drop from £330k on 2007. Still able to pay both mortgages but its tight going.
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Drowning in negative equity - worried sick
