Keep mortgage, swop house?

mareliada

i have a mortgage, which like everyone else's, is now more than the house is worth. but is it possible to sell the house for 100k, for example, to buy a house for the same price elsewhere but keep the same mortgage? i can afford the repayments of the original mortgage but ideally would be able to move to somewhere else.
essentailly keeping the same mortgage but swopping houses? the mortgage is for 245k, we would never get that for the house now, but for the price we could get for it we could find somewhere of same price we would be happy to live. and like i say we can afford to continue to pay the current repayments but feel we might be happier living closer to city.

Brazzer

At one point there was talk about 'negative equity mortgages', this is something that was done in the past but then as we all know during the boom time the banks had no issue lending money. I don't think this is an option now, it was actually a mortgage broker who told me about it. It would open up the housing market again, sales etc but the problem lies with the banks, they won't lend to you based on the fact you are in negative equity and as the bank owns your house until your final payment, they won't let you move to another house with the existing mortgage, the deeds of your existing house are with the bank and once you sell, the deeds transfer to a new owner so the mortgage must be paid and started again.

On a positive note, hopefully you are benefitting from a tracker mortgage, something you certainly wouldn't be getting if you ever did manage to sell and buy again to include your negative equity deficate. They would have you over a barrell with a higher interest rate all be it you would be in the place you want to live but will forever be paying back on a higher rate than you are paying now.

A bit longwinded but have gone through the mortgage process again recently and IMO the banks are seriously NOT lending to house buyers, they don't seem interested in the business and can leave applications for weeks and months on end so you are in limbo. We had our fill of them, took months to deal with the banks, we went to 3 in total and were approved by all but then the crap starts with them. They'll approve you but don't really want to lend the money and jumping through hoops sounds like fun compared to the constant crap they put you through now. Roll back 7 years ago when we first bought, we were given 7 times our salaries and offered more for a new car!

Go to a broker, don't go direct to the banks, you'll be wasting your time so it's easier to hear it from 1 person. It'll only cost you the price of a phonecall...

killers1

Mareliada, it will depend on your lender. There are a number of Bank's that will allow people transfer negative equity on a property to a new property. They will only do this where the overall level of exposure is not increasing and you qualify for the amount borrowed based on their current calculators. E.g a couple have an apt worth 200k with a mortgage of €300k. Bank will allow them sell for €200k to buy a house worth €200k & retain a mortgage of €300k on the new property. They would be more willing to look at this for you if you were managing to reduce the total amount borrowed e.g. if you had €40k savings and were reducing the €300k to €260k they would be much more open to it.

mareliada

thanks for the replys, very useful.
i do have a tracker and at the mo it is really great. i think i will concentrate on the upkeep of the house we are in and puttign some savings aside so in a few years we might be in a better position to move on.
thanks again for takign the time to offer your advise

daltonmd

mareliada wrote: »

i have a mortgage, which like everyone else's, is now more than the house is worth. but is it possible to sell the house for 100k, for example, to buy a house for the same price elsewhere but keep the same mortgage? i can afford the repayments of the original mortgage but ideally would be able to move to somewhere else.
essentailly keeping the same mortgage but swopping houses? the mortgage is for 245k, we would never get that for the house now, but for the price we could get for it we could find somewhere of same price we would be happy to live. and like i say we can afford to continue to pay the current repayments but feel we might be happier living closer to city.

There was talk of NE mortgages but it would cost you your tracker.

You would then be looking at a completely new mortgage at today's rates (if not a bit higher) of 145k NE plus 100k house price and other costs and fees.

Your new mortgage could cost you between 1200 and 1400pm.

You have to weigh up travel/commuter costs and time and basic quality of life, and pay a little more or pay less and stay where you are.

I would go directly to the lender ( I know you have been advised otherwise) but you have the tracker as a bargaining chip and I would use this and negotiate with them for either a more reasonable interest rate or for them to buy the tracker for some credit off the Negative Equity. Even if you decide not to go ahead it might be worth your while checking out the option in the event that change your mind down the road.