Negative Equity Problem, maybe there is a solution
Negative equity mortgages are are going to be introduce by a number of bank shortly provided the central bank approve
The idea is to allow property owners who are trapped in small properties to trade up, while carrying the negative equity portion of their mortgage with them.
There are a number of important points that you should note:
1. Any new mortgage will be on a fixed or variable basis so those with tracker will lose them.
2. You must have your property sold before taking out the new mortgage.
3. The maximum negative equity portion you can bring with you is 25pc, so for your €50,000 you may get a total new mortgage of €250,000.
4. You will have to qualify for the new mortgage in the normal manner so you may not qualify if you are in arrears or in an insecure job.
5. You will still be in negative equity, only more so. However, you’ll be living in accommodation which is more suitable for your needs.
All things being equal, approach your bank by all means and enquire what’s on offer and if they will approve you in principle.