What Options Are There For Dealing with Negative Equity?
At Negative Equity NI, clients dealing with negative equity often come to us believing that there is nothing that can be done to solve their property debt problems, or thinking they will have no choice but to go bankrupt.
There are, however, a range of solutions that can be pursued in order to deal with a property in negative equity. Once we have completed an initial consultation with our clients, we can begin to plan the best course of action for dealing with your problem debt.
| Informal settlement.
For the majority of our clients, the best option available when dealing with negative equity is usually a negotiated settlement with their lender. This approach, also known as a shortfall sale, typically 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. Our client will then have 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.
It isn’t usually a good idea to try to resolve debt problems by taking on more debt, however, in some cases, it can be possible to deal with problem property debt by remortgaging.
While not suitable for everyone, restructuring your mortgage is an option that we might pursue with clients who are struggling financially due to unexpected changes in their circumstances, such as a growing family or a change in your work situation. We have successfully negotiated with our clients’ lenders to extend their mortgage term, allowing them to stay in the home they had worked so hard to secure.
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.
| An IVA.
An individual voluntary arrangement (IVA) is a legal agreement between you and your creditors. IVAs are a possible solution we would consider where a borrower owes money to multiple creditors.
Most, though not all, 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.
| What do our clients say?
We’ve helped hundreds of families move on from negative equity and mortgage debt, and we genuinely want to achieve the best possible outcome for every client we work with. That’s why 99% of those who have reviewed our services at reviews.co.uk would recommend Negative Equity NI to others. Here is an independently verified review from a recent customer.
I was very sceptical at the beginning but didn’t know where else to turn. I read an article on Money Supermarket and the individual said it was too good to be true. On the contrary, the result they predicted during our first meeting was delivered. They made a very stressful process so much easier, doing all the background work, negotiating etc. And always ready to advise. A big thank you, especially to Lesley, who appeared to have a genuine interest in our plight and kept in contact throughout, never judging, just being supportive. My £107,000 debt is now £32000. This company WILL deliver..
| Contact Us Now.
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. In September alone we were able to write off a total of £1,287,323 in unaffordable mortgage debt.
Whatever the situation, if you’re dealing with negative equity, we will offer you a bespoke solution based on your own personal circumstances. Whatever your circumstances, the first step to dealing with your property debt is to contact Negative Equity NI for an initial free, no-obligation consultation with one of our advisors.
Take a look at our reviews and call us on 028 9018 3223 or go to our website and arrange for us to call you at a time that suits you.