Is Your House Worth Less Than Your Mortgage?
After the financial crash, many homeowners found themselves with outstanding mortgage debt that was worth more than the value of their homes due to house prices falling. This situation is known as negative equity.
Since the property crash ten years ago house prices have risen, but many homeowners still find themselves in properties that have not regained their full value, with a mortgage that still exceeds the value of the house.
For some borrowers, this isn’t a problem. If you can afford your monthly repayments and the house still meets your needs, you can continue to pay off the remainder of the mortgage, reducing your debt and eventually getting back into equity.
For others, however, negative equity can be a serious problem. If you need to move house for any reason, the money you would receive for selling your house won’t be enough to pay off the money you still owe to your lender, which will leave you stuck owing the difference but without a house, and almost certainly not enough money to pay for the deposit on a new property.
People find themselves in this situation for all sorts of reasons. Perhaps you bought a house as a couple, but now you’re separating and neither partner can afford the mortgage on their own.
Maybe you need to move city in order to start a new job, or you’ve just become unemployed making your monthly repayments unaffordable.
| How can we help?
Whatever your circumstances, Negative Equity UK can help. We’ve helped our clients write off more than £42,500,000 of debt, allowing them to move on with their lives. We are property debt specialists and the only company of our type that is authorised and regulated by both the Financial Conduct Authority and Chartered Accountancy Regulatory Board.
If you’re struggling with a mortgage you can’t afford or you need to move on from a property in negative equity, call us on 0161 631 2727.
How is home equity calculated?
Home equity is calculated by subtracting the amount you still owe on your mortgage from the current market value of your home.
Can you have negative equity?
Yes. With standard loans, your home equity will increase over time. With negative-amortizing loans — a loan with monthly payments less than the interest rates — your equity decreases over time as your owed balance increases.