Negative Equity

In negative equity but want to sell your house or are you struggling with the repayments?

Our debt experts are here to help and are committed to making everything clear as well as ensuring the best outcome for your circumstances. As a leading specialist in dealing with mortgage lenders, you can trust us to liaise with your bank on your behalf. Contact us for more information on 028 90231770 or debt@rgsinclair.co.uk to arrange a free, no-obligation consultation.

Negative Equity: Introducing John and Sarah

John and Sarah bought their home in 2007 for £250,000.00 on an interest only mortgage. In 2007, banks were lending up to 100% of the value of a property so John and Sarah’s mortgage is £250,000.00. As it’s an interest only mortgage, all they have been paying off since 2007 is the interest, their mortgage debt has not reduced but the value of their house has reduced to £175,000.00.

They are in negative equity.

What is negative equity?

Negative equity is when a mortgage is higher than the value of the property that it’s secured on.

Why is negative equity a problem?

Selling your home

In our example, John and Sarah would have to pay another £75,000.00 to the bank following the sale of their house, providing they can get £175,000.00 for the sale.

They cannot sell their house if they cannot repay the bank.

Remortgating

If John and Sarah want to remortgage, they will not find a bank that will give them a mortgage for more than the value of their home. Their house is worth £175,000.00 and they need a mortgage of £250,000.00.

Even if they only wanted £175,000.00, banks are no longer lending 100% of the value of a property so they need a minimum deposit of 5%, that’s £8,750.00 on top of the £75,000.00 they need to pay to their bank to pay off their current mortgage.

John and Sarah got a good rate when they took out their mortgage in 2007 but now that it has come to an end, they are paying interest at their banks’ standard variable rate. This means they are paying much more each month and it only goes towards the interest on their mortgage, rather than paying off any of the balance. Paying off the balance would at least go some way to helping them out of negative equity. Instead they cannot afford the monthly interest repayments and can’t sell their home either – John and Sarah are trapped in negative equity.

What can we do?

At Robert G Sinclair Solicitors, we have been working with banks for over 25 years. As banking specialists, we know how they think and what they can and cannot do. We will work with you and your lender to get the best outcome for everyone.

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Call us today on 028 9023 1770, or fill in the call back form below, to arrange your free initial consultation.
At your free initial consultation our legal expert will make everything clear from the costs involved to what to expect along the way.
We'll work to get you the best possible result and promise to keep you up-to-date at every stage.

We make everything clear.

Contact Edmund Sinclair for a free, initial consultation on 028 90231770 or complete the enquiry form and we will call you back.

  • Edmund Sinclair LL.B
    Edmund Sinclair LL.B
    Director
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Edmund Sinclair LL.B
Director

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Edmund, educated at University of Ulster, specialises in Lender Services, Insolvency and Business Restructuring. He currently manages a top 5 UK Bank mortgage litigation contract and has extensive experience of asset and debt recovery.

He conducts the day to day operations of a large mortgage litigation team and has carried this out for 20 years, ensuring that the firm adheres to stringent service level agreements. Edmund has developed a team within lender services to proactively address rehabilitation issues in order to maintain the position of the lender within a difficult property market. He has extensive experience in all areas of recoveries including asset recovery, shortfall recovery and bankruptcy and his clients include lenders and large corporations.

Stemming from his experience in these areas he provides training and seminars on repossession procedures e.g. to Citizens Advice Bureau and debt advice agencies.

Edmund has been instrumental in developing core ICT competencies of the firm.

Approachable, helpful and most of all extremely knowledgeable- a go to person!” Creditor, Belfast.

Housing Rights have worked closely with Edmund regarding client cases for several years now.  Not only is Edmund extremely knowledgeable in his field he works quickly to resolve cases to the best outcome for everyone involved.”

Housing Rights, Belfast.

Call us today on 028 9023 1770, or fill in the call back form below, to arrange your free initial consultation.
At your free initial consultation our legal expert will make everything clear from the costs involved to what to expect along the way.
We'll work to get you the best possible result and promise to keep you up-to-date at every stage.