Being stuck in negative equity can be financially and emotionally draining. Dealing with negative equity is easier if you can afford to keep up with your mortgage repayments and wait for the property market to improve. However, it becomes a problem if you want to sell your home. Unless you can afford to repay the difference between the property value and the mortgage, you may find it difficult to sell your home.
Negative equity is when the value of your home is less than the mortgage secured against it. For example, if you bought your property for £180,000 with a mortgage of £135,000, but it is now valued at £120,000, you would be in negative equity.
How easy it is to sell your home with negative equity will depend on how much you owe, the value of the property you want to move to and whether you are up to date with your existing mortgage payments. There are a number of options for dealing with negative equity including staying in your home and making overpayments on your mortgage, increasing the value of your property through development or renovation, renting out your property or borrowing the difference.
Before making a decision, you should speak to your mortgage provider to get an idea of how much you owe and whether you can transfer your mortgage to another property. If you move your mortgage over, you would transfer the outstanding debt to the new property and increase the size of your existing mortgage to make up the difference. As long as you don’t need to move and continue to pay your mortgage each month, you won’t have to worry about repossession and can slowly climb out of negative equity.
If you’re struggling to meet your mortgage repayments and are stuck in negative equity, you may need to sell your home. Selling your home when it’s in negative equity will break your mortgage terms, will be expensive and should only be an option if you’re in severe financial trouble. You will need your mortgage lender’s permission to sell the property if you know you won’t get enough from the sale to pay back what you owe. The lender will then send you a bill for the difference and you will be responsible for making the necessary arrangements to repay it. Failure to do so could result in you being taken to court.
We are here to help you sell your house fast. We can offer a guaranteed cash purchase for your property in a timescale that suits you. It could be a couple of weeks, or even just a few days. You no longer have to pay estate agents fees and deal with the potential long delays of a traditional sale process.
We will help guide you through the process of selling your home. From the initial valuation to the final completion date, rest assured you are being guided by trusted property professionals who are here to help you get the most out of your house sale and ensure you have a hassle-free experience.
Like you, every property is unique, so we’ll just need a few details before we can make you an offer.