Make 2019 the year you deal with your negative equity
Many homeowners in Belfast and across Northern Ireland have found themselves trapped in negative equity and dealing with unaffordable property debt since the crash and recession ten years ago, hoping that the situation would improve by itself as house prices increased again.
House price growth has been sluggish, however, and this isn’t likely to change with house prices all over Northern Ireland predicted to achieve only a moderate rate of growth in 2019 and with increased uncertainity because of brexit it is time to do something about your negative equity situation.
You don’t have to wait and hope that things will improve, however. If you’re struggling with unaffordable property debt in Northern Ireland, we have solutions for dealing with negative equity.
For the majority of our clients, the best option available is usually a negotiated settlement with their lender. This involves the borrower selling the property and our team negotiating with the lender to write off as much of the shortfall from the sale as possible. This leaves our client with an agreed, affordable amount to repay either in instalments or as a single lump sum payment depending on what makes the most financial sense for them.
We often find that our clients are sceptical that a bank would agree to write down debt, but there are good reasons for them to do this. Repossessing a property and then paying someone to sell it for them is a long and expensive process for the bank and they rarely get the full market value for the house, so agreeing a settlement is often the best option for both parties.
An Individual Voluntary Arrangement.
An individual voluntary arrangement (IVA) is a legal agreement between you and your creditors. IVAs are a possible solution we would examine where a borrower owes money to multiple creditors.
Most types of debt can be included in an IVA, including mortgage debt, credit card debt, unpaid council tax or money owed to HMRC. An IVA might also be worth discussing if you own multiple properties with mortgages from different lenders, or you have unsecured debt from several creditors.
Once a settlement is agreed with your lenders it can be paid as a five year payment plan, known as a contribution IVA, or, if you can afford it, as a single lump sum.
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.
For most of our clients, it won’t be a good idea to try to resolve their debt problems by taking on more debt, in a few cases, however, it can be possible to deal with property debt by remortgaging.
While not suitable for everyone, restructuring your mortgage is an option that we might consider with clients who are struggling financially due to unexpected changes in their circumstances, such as a change in your work situation, if you have been made redundant, retired or had your hours reduced, or if your family is growing.
We have successfully negotiated with many of our clients’ lenders to extend their mortgage term, allowing them to stay in the home they had worked so hard to secure.
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We have successfully negotiated hundreds of cases every year where we have arranged the sale of our clients’ homes and reached an affordable debt settlement with the lender.
Whatever the situation we will offer you a bespoke solution based on your own personal circumstances. The first step to dealing with your property debt is to contact Negative Equity UK for an initial free, no obligation consultation with one of our advisors.
So, don’t wait for your negative equity to take care of itself, make 2018 the year you deal with your unaffordable property debt. Take a look at the rest of our reviews and call us on 028 9018 3223 or use our callback form to arrange for us to call you at a time that suits you.