'Negative Equity Mortage' just a standard mortgage with a huge deposit?

Robertr

Hi,

I just got off the phone with one of your 'Mobile Mortgage Managers' after having a discussion about negative equity mortgages. It turns out, your negative equity product is not a negative equity product at all!! You have to pay off all the negative equity up front along with the deposit on the new property. What’s that all about? We had a heated discussion where she said that I did not understand and that many people had availed of this option.

Here are the figures that she sent me by email:
Existing property value:......................€160k
Current mortgage balance...................€350k
Negative Equity mortgage...................€190k

New proposal details:
Savings...........................................€60k
Purchase price..................................€500k
Amount required................................€450k
Stamp duty......................................€5,000
Legal fees........................................€1,500
Negative equity added on....................€190k

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Total outlay......................................€696k
Total funding....................................€510k
Total Cash needed............................€246 (€60k above + 186kadditional)

She could not explain to me any benefit in this option but kept saying that it 'worked for other people'. What worked?

I suggested that she must have here calculations wrong as this was not offering any benefit over me paying the negative equity off myself and then taking out a new mortgage. I asked her many times to help me explain what I was missing but she just dismissed me and said she had to go, that I could talk to anyone in the bank who would explain the same thing.

Am I going crazy here or are you offering nothing more than a standard mortgage with a huge deposit that clears any negative equity?

My idea of a negative equity mortgage (where you carry the negative equity to the next mortgage) is as follows:

Existing current property value...........€160k
Current mortgage balance..................€350k
Negative Equity mortgage..................€190k

New proposal details:
House Price.....................................€500k
Less Deposit (10%)...........................€50k
Amount required (90%)......................€450k
Stamp duty......................................€5k (paid separately)
Legal fees........................................€1.5 (paid separately)
Negative equity added on ..................€190k

---

Total outlay......................................€696.5k
Total funding....................................€640k
Total Cash needed...........................€56.5K

Please explain what I am missing?

Regards,

Rob

Bank of Ireland: Sean

Hi Robertr,

Thank you for taking the time to post.  We can not provide mortgage advice such as this on a public forum.

You will have to contact your account holding branch directly and ask to speak to a mortgage adviser.  A mortgage adviser would be more than happy to help you with this query.  You can find the contact details for your branch here. 

Thanks

Seán

Robertr

Hmmmm....not sure why it took over 24 hours to give that reply. The 'Mortgage Advisor' was not more than happy to help me with my query which is why I posted here. She basically hung up.

Bank of Ireland: Sean

Hi Robertr,

Apologies for the delay in responding to your original　query.  We were　trying to get more information that may have been of some help　to you.　 As this was very customer specific we were unable to do this and we were asked to refer you to your branch.

In your original post you mentioned you spoke with a "Mobile Mortgage Manager".　 We were advised to refer you to the mortgage adviser in your local branch.　 Please find the contact details for your branch here.

Thanks
 
Seán

Tommy13

Roberts,

I had a very similar experience when I enquired about a negative equity mortgage with Boi 'mobile mortgage manager'.  Met with her and gave her all my financial details: current home 100,000 in NE and I have 60,000 savings etc.  I was hoping to carry some negative equity to be included in a new mortgage totalling 300,000.
She promised to do the sums and get back to me within 2 days, that I was a lifelong valued customer of Boi etc. - 6 days and after emailing her twice she eventually responded with a 2 lined email.
Basically, she said that I had a shortfall of 70,000 (ie I needed a total of 130,000 savings)
This means that I would have to pay back all my current negative equity and also have 10% deposit for the new mortgage??
I explained to her that I did not understand how this was a 'negative equity mortgage' if I could not carry NE and also had to have 10% deposit for the new mortgage .....she never replied.