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Shared ownership and negative equity

  • 09-01-2011 4:45pm
    #1
    kam3qnwvebf4jh
    Closed Accounts Posts: 138 ✭✭


    My sister bought a house under the shared ownership scheme back in 2007 worth 166k. From the documentation she has it appears to be a 60:40 ratio between the council and her, as in the council gave her an advance of 65k to purchase 40% of the house over 25 years with the option to buy out the council at any time during this term.
    The house is now worth about 110k but the rent that the council is charging is still the same. About 350 mortage and 350 rent. Between the rent and the mortage she is paying , it would be much cheaper for her to remortgage for the 110 and have full ownership of the house.

    My question is this, if she wanted to fully remortage now, would the council be looking for her to pay them 60% of the original 166 or should the council shoulder 60% of the 55k loss and reduce the asking price by 33k?

    Thanks


Comments

  • #2
    ricman
    Closed Accounts Posts: 1,559 ✭✭✭ricman


    Ask in centrecare , advice centre, or just ask the council, I think they will ask her to pay the original price, as its on the contract ,ie her mortgage is half of 160k, not half of 110k.OR just ring up threshold advice centre, google threshold.ie
    When the contract was made no one expected prices to decline, but there may be a clause in the contract to deal with value ,price changes.


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