Hi guys

Just need some help...

Basically I have a house on the market at 101,000 but we have had an offer of £90,000. My mortgage currently stands at about £97,000. That obviously means we would lose £7000.

If we bought a house at £115,000 does that mean I would simply have to have a mortgage at £122,000 and pay the usual 5% deposit (essentially meaning I lose all my previous deposit when I first took out the mortgage) or instead is it that I would get a mortgage at £115,000 and then pay the 7000 as a lump sum?

Thanks - Matt

Hi Matt,

Im afraid not. If you take the £7,000 hit then thats it, your equity / deposit gone and you will not be able to buy on unless you have the £7,000 to pay off the negative and also have another 5% or more to put towards the new mortgage. It sounds like you either need to hang on for a higher offer, or forget the moving idea and stay where you are until things improve.

Also double check with the lender with regards to Early repayment charges that may be present, if you sell and dont buy on then you may be liable.

Sorry its not the news you were looking for.

Hi there

Thanks for the speedy response! So basically.. we would have to pay the £7000 as a lump sum and then if we bought it at £115,000 we would also need a deposit of £5750 (5%) meaning a total of £12,750 from us?

EEK!

So there is no way at all we could simply get the money added to the mortgage like my first suggestion?

Looks like we will keep waiting then!!

Thanks

Hi again,

Im afraid to say...yes that would be the situation. On exchange / completion the solicitors would expect the payment of the £7,000. You would then need to find a lender that would lend 95% for the purchase of the new one, and then put a further 5% towards it. There are very few now that will lend 95%!!

The scenario you put forward would mean borrowing over 100% of the property value, a thing of the past....now causing people problems.

My advice to you would be to stay where you are and hold on for a market turn around, or you will lose £7k and will peobably have to go into rented....which doesnt make sense.

If your in a situation where you HAVE to move, i.e. expanding family etc then hold out for a £97k offer, if not, dont move.

Hi

Thanks again!

Nationwide just phoned me (had left a message) and explained that actually I could do either. Thanks to my mortgage being portable what they would do is move my £97,000 to the new property - and then the price differentation of the new house.

They would also offer the 5% deposit, so in effect we just pay around £5750 in cash.

Thanks for your help, but looks like we can move!

But what about the £7,000 loss on the current property??

It doesnt sound to me like everything has been taken into account by nationwide....

Ive been a broker for a number of years now, including dealing with nationwide.

In my eyes you will need to find the £7,000 loss that you will incur, aswell as the £5,750 and the 5% deposit for the new property.

Go into Nationwide and speak to an adviser face to face and tell them the FULL situation including the offer you have on your property of £90,000 combined with the current mortgage of £97,000.

I look foreward to your response..

Hi there

Basically apparently because it's a portable mortgage I can do it... also they have a scheme for negative equity people apparently, and it's like an individual agreement with me. I need to get it in writing though.

So it looks like I'm ok... the advisor I spoke to then spoke to his head office to double check..

So looks ok?

Portability just means that you can take the mortgage to another property, it has nothing to do with loan to value etc. Im not familiar with the negative equity deal that they may have running with existing customers, so thats where I draw the line on knowlege. It will be great if they do offer some kind of scheme with that! Just make sure its not something that will add debt to you though, as it will be inexcess of £12k combined with the new 5% that you would need. One way or another, you will need to repay that £7,000 loss. Just make sure that its worth it.

Feel free to post the details that they send you on here if you fancy a second opinion.

Best of luck