Loosing money on house sale

[crazymotorbik...]

Hey,
I bought my house in 2010 for 67K. At the time i rushed into buying it and i think slightly over paid by possibly 2k.

3 years on the house down the street has just sold for 57K. Its the same layout as ours but decorated to a much higher standard IE New carpets, kitchen etc.

This has me seriously worried. If mine sold for 55k i'd be loosing 12k!!! and that's before solicitors fees etc.

I've thought about renting it out but Halifax appear to charge a ridiculous product fee for for changing to a BTL mortgage plus an additional charge every month.

What happens when you sell your home for a loss? Do you simply carrying on paying the mortgage till the loss is paid off or do you need to take out a loan?

Currently feeling very trapped. I can't afford to move but i'm desperate to get out of the giant sh*thole that is Grimsby.

Cheers,
Shaun.

[fatpies]

Just look up negative equity.

Effectively if you sell it, you're going to have to make up the short fall on the sale price and the loan amount.

Kinda similar to when you get repo'd bank sells it, and comes after you (unless you go bankrupt) for the difference.
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"It's easy to attack and destroy an act of creation. It's a lot more difficult to perform one"

[CaNsA]

[hellkat]

re the negative balance: dunno. Not been in that situation myself. I expect the mortgage company would simply make a smaller loan and make you pay that off too - but there may be others who have experience of it and can advise.

Renting would give you more grief right now, as the rules regarding what landlords legally have to do are currently tightening up.

You admit to being impatient getting in, now you seem impatient to get out. Perhaps impatience is what will always cost you money in your life.

Personally I'd sit it out, but then not everybody is stupid like me
Negative equity is a shit place to be.
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[reckless_b]

there are lots of BTL mortgages out there, several intrest only with no proof of income required and no fees or very low fees that can run until age of 90, would you intend to rent the place out?
Worth talking to mortgage advisor about options.
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40 years on the road on and sometimes off bikes with a very recent OFF

[Sload]

Unfortunately you bought into an overinflated balloon of a market, e.g. you bought at the top of the swing, not the bottom.

This kind of doesn't matter if you keep the house, and assuming our future path follows past, and the world as we know it does not implode then in several years you will be fine.
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[Kickstart]

Hi

Been there. House dropped about 1/3 in value and then took about a decade to get back up to what I paid for it.

If you sell it then the mortgage company would still want the mortgage paying back in full. Either from the proceeds of the sale or from other sources (such as you taking out a £12k loan). Can't see them continuing with the mortgage as there is no property there for the mortgage to be secured on.

What you might get is someone willing to give you a larger mortgage to carry over the negative equity onto the purchase of another house. However I would be surprised if that would happen currently (difficult enough to get a mortgage even if you have a big deposit, etc).

All the best

Keith
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[Nexus Icon]

If you're buying another property it's not so much of a problem; the value of the new house is going to be rising/falling at around the same rate as your current one so your £12k loss will be regained as the new house goes back up in value.

If you're selling up to get out of being a homeowner then it's a bit more tricky and the best advice is to put your plans on hold awhile and wait it out. Prices will go back up, it's inevitable, it's just a matter of time.
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Greetings from Shitsville!

[trevoriv]

Same boat, bought house 5 years ago for £90k and spent £15k on it and just sold it for £80k. How to lose £25k in 5 years!

Im 'lucky' though. Only owe £78k on the mortgage so im actually up. (Despite paying £40k in mortgage payments in those 5 years!)

Unfortunately the few k i've made on the house sale has been swallowed up by solicitors and estate agents fees (and stamp duty!).

However as i'm buying a new house any negative equity would have been covered by my new mortgage on the new house, just meant i've had to save up a deposit to buy the new house.

If you're planning on buying a new house you need at least 95% LTV but realistically 90%.
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[daemonoid]

Renting really isn't that tricky, I have a couple just down the road in Scunthorpe.

The yields are good so you should be able to cover the mortgage payments. You're better off handling and advertising yourself, but you can get a local estate agent to do it for you (they'll charge about 10%).

Assuming you're outside your mortgage introductory period just change to another lender and do it through an advisor. They can get better rates especially in that area.
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[Polarbear]

I would certainly look at letting. Yes it may be a PITA but it means you aren't going to lose your money. If you can remortgage over a longer period and your letting fees cover it you are OK.

That said, I'm not convinced house prices are going to rise very much, if ever in the next 10/20 years. People with the financial background will probably have a better idea than me, but my house in the last 8 years I have owned it has gone up in value the sum total of £0 and at the moment is dropping. The old adage of bricks and mortar being safe, well I'm not sure that is ever going to be the case while average people who buy average sized houses have fuck all money for the foreseeable future.

If you are just looking to move though, as said earlier, your new house will be that much cheaper so it is a bit of swings and roundabouts.
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Triumph Trophy Launch Edition

[reckless_b]

at present I am renting a few out, with returns of between 10 & 12% and am currently looking for another property whilst prices are at a low, I use an agent for the rentals as I found it a real pain to deal with applicants to the houses, the agent checks references, takes deposits handles bonds and basically sorts the wheat from the chaff,for a fee of 10% but the hassle it saves me is well worth it, I have been in the office while the secratary is on the phone dealing with benefit claims etc and well, you can keep that side of the job, much better to sit at home and let the money come in.The agent is renting out one property for £150 pcm than I was charging when I dealt with everything so the 10% is well covered.
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40 years on the road on and sometimes off bikes with a very recent OFF

[Rogerborg]

Are you saying that prices in Grimsby have plummeted faster than anywhere else?

If not, then you have lost the sum total of sod all unless you want to cash out of the home ownership market. Sell for £55K and buy an equivalent shed elsewhere for £55K, and you're down nothing except the costs of moving the mortgage and your sofa.

This works out even better for people wanting to moving up the property ladder. Falling house prices are great for everyone except banks and cashing-out speculators.
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[Alpha-9]

Move out and rent it, bonus income

Need another house though
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Fzr-600 1999

[Kickstart]

[Sload]

[Kickstart]

[st3v3]

[Polarbear]

[daemonoid]

[Polarbear]

[st3v3]

[Ichy]

[daemonoid]

[chris-red]

I wish I could pay £67k for a house.



A one bed flat here is £100k+
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