Sell apartment and change mortgage to unsecured loan

kdowling

Has anyone sucessfully managed to sell their apartment (with permission from the bank) and have any negative equity changed into an unsecured loan repaid at the same terms of origional mortgage?

Victor

The banks have little or no reason to do this and are unlikely to do so.

kdowling

isn't a mortgage in negative pretty much unsecured anyways?

I mean if you are in negative equity of €100,000 and default on your mortgage they will be €100,000 out of pocket and so there is €100,000 unsecured anyways.

I suppose it could always rise in value but in my case its a one bed apartment so unlikely to rise much so maybe they might go for it?

I've heard of it happening but looking for advise on the best way to approach the bank on it.

ballooba

It's one thing have a good contract go bad, which is what happened when the security on the loan was depleted. It's quite another thing to enter into a bad contract.

juan.kerr

Presumably the Banks are taking a longer term view. The negative equity will hopefully reduce over the next 20 years in line with the term of the mortgage.

As long as the mortgage holder is in a position to service the mortgage it isn't in the Banks interest to change anything.

If the plan is to buy somewhere else then defaulting on the existing mortgage will knock that on the head anyway.

Presumably you also realise that the Banks won't treat strategic defaults in the same was as a a valid customer default...

kdowling

I've only heard of this happening anecdotally but haven't heard any details.
Does anyone know under what circumstances a bank would be more likely to go for this?
I have a feeling they are going to offer a negative equity mortgage but i would like to just rent from now on.