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Moving house and in negative equity

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  • 20-02-2012 12:00pm
    #1
    pmorddny
    Closed Accounts Posts: 3 ✭


    We're buying a new house and we're in the process of selling our house. We're in negative equity and we owe our bank 25k. We've giving up our tracker mortgage in the process :( but, offhand, does anyone know of any incentives a bank will give us to stay with them? We've already got mortgage approval with another bank, but I just wondered if there was anything I use as leverage with our current mortgage provider.

    I thought I would ask this here to save me a wasted visit to the mortgage advisor at our local branch!!

    thanks
    Paul


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    #2
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    pmorddny wrote: »
    We're buying a new house and we're in the process of selling our house. We're in negative equity and we owe our bank 25k. We've giving up our tracker mortgage in the process :( but, offhand, does anyone know of any incentives a bank will give us to stay with them? We've already got mortgage approval with another bank, but I just wondered if there was anything I use as leverage with our current mortgage provider.

    I thought I would ask this here to save me a wasted visit to the mortgage advisor at our local branch!!

    thanks
    Paul

    Hi Paul,
    Are you paying off the negative equity from your own resources to clear the mortgage on the sale of your existing house? To be honest your bank will be happy to see you repaying the mortgage and to have another tracker rate loan off their books! With regards to any incentive to staying with them they will offer you absolutely nothing to be honest. They won't negotiate on their advertised rates at all. There are cases out there where people are approaching the banks to say they are selling the property but can't afford to repay the negative equity. In some cases the bank will write off the o/s balance as they are giving up their tracker but only in cases where they can prove it's not affordable and may have been in arrears on the original loan. In any case people who's lender write off part of the balance have to inform the ICB (Credit Bureau) and this is seen as a black mark against your name for 5 years which would prevent you being able to take out another mortgage in the meantime.

    Just make sure that the bank you have your new approval from is the cheapest possible rate you could get from the market for what you are looking to do and that you're not just going with them because they approved the amount you needed without researching all the rates available...


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