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Who gives loans to cover negative equity?

  • 21-09-2016 12:35pm
    #1
    Trojan
    Registered Users, Registered Users 2 Posts: 16,414 ✭✭✭✭


    I have a family member who is looking to sell her house. She'll be taking a hit of approximately €28k between the mortgage price and the offer price. The bank (Dansk) wants to know how she'll pay that back before allowing the sale to proceed.

    I'm assuming she's not the first person in this position in this country. What institutions are giving loans to cover this? Since there is no physical asset (i.e. house) to back the loan, what do they require in terms of security? Any advice on this situation?

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Comments

  • #2
    coylemj
    Registered Users, Registered Users 2 Posts: 25,620 ✭✭✭✭coylemj


    I don't understand your friend's logic in seeking a loan to cover negative equity - as you say there is no security and therefore it will count as an unsecured loan. How does she propose to pay this back and over what period? And why would any bank lend that much money to a person who doesn't own their own home? Even if she did own a house with positive equity, there would be questions as to how she could afford to service such a loan.

    She can only do it with a guarantor, a person with tangible assets (excluding their family home) sufficient to cover the liability but she will still have to convince the bank that she can afford the repayments.


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