Negative Equity problems - Rescue My Properties

                

Negative equity help ?

Negative equity occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan. Rescue My Properties is the leader in helping landlords with buy to let portfolio deal with negative equity problems.

What can I do about negative equity?

Negative equity – when you owe the mortgage company more than your house is worth – affected more than 1 in 20 people, at the end of 2011. Another 16.6% were on the brink of negative equity. However, negative equity is not a major problem – until you want to sell your home Stay put If you can, stay in your home and slowly pay off your mortgage. Give it a few years and prices might rise and you will find yourself in positive equity This will either be because property prices have risen, or because you have paid of some of your mortgage Negative equity only becomes a problem when you sell your home, or if you want to borrow against it Reduce your debt.

If you have some savings use it to pay off some of your debt. Mortgage rates are almost always higher than savings rates, and you also pay tax on savings interest, so the best return you can get on any spare money you have is to pay down your mortgage Most mortgage companies allow you to pay off up to 10% without penalty, though smaller repayments are also helpful. Check your contract to make sure If you are struggling with your mortgage repayments you could end up having to sell your house. This is a problem at the best of times, but is a particular problem if you are in negative equity. But there are a number of steps you can take to avoid repossession – watch out for our new guide –

How can I avoid repossession?

Seek professional advice Because you could end up in serious debt you should seek professional advice
There are a number of places you can go for free, confidential, independent, unbiased and professional advice. Citizens Advice Bureau, Shelter and National Debtline Speaking to a real person with experience is far more efficient than trawling through the internet. You can explain you position, and they will be able to give advice tailored to your situation Sell and repay shortfall over time.

Most mortgage lenders will allow you to sell your home and then pay off any shortfall over a period of time. But this is clearly not an ideal solution You will need your mortgage company’s permission to sell for less than the mortgage is worth You will also need somewhere to live, and to pay all the hidden costs of moving which can total in the tens of thousands

LPA Receivers Practice guide

Negative equity afflicts ‘half a million households’BBC – News:

Nearly half a million UK households are still in negative equity – meaning their homes are worth less than the mortgages on them, figures show.

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