What are your options if you need to sell property quickly with negative equity?

What are your options if you need to sell property quickly with negative equity?

What are your options if you need to sell property quickly with negative equity?

Being in a negative equity is an unpleasant situation.  You find yourself in a position where your house is worth less than the amount you owe on your mortgage.  Even if you sell the property quickly, you will still somehow have to find the thousands of pounds difference between the sale price and the amount required to pay off your outstanding mortgage.

In an uncertain financial climate, a negative equity situation may get increasingly worse if property prices do not rise.  As a result, many people have to wait years before the valuation of their property matches the mortgage redemption figure, at which point they can finally agree to their your property.

The majority of people in negative equity are not able to use their savings or borrow more money in order to pay off their negative equity mortgage.

Here are a couple of options for your consideration.

(Please note that this article does not constitute financial advice and is merely for educational purposes only.  You should contact a financial advisor or your solicitor before making any decision about your financial future.)

Of course, if you can make mortgage payments regularly and do not need to move then negative equity is not an issue for you.  However, if you must move house then being in negative equity can make things much more complicated.

selling an inherited property quickly

  • Rent your property to generate income

You can rent your property out to a tenant, subject to your lender giving you consent to let in writing.  They will usually agree consent for you to let your property for a limited period and you may need to renew their consent after your initial period expires.  This can vary greatly from lender to lender. Some lenders are less lenient that others,  especially those who are looking to close down their loan books and would rather repossess you.

If you are not a full time landlord then you may wish to consider appointing an ARLA certified letting agent.  Charges vary so it is best to shop around and look for agents who charge around 5-10% of your rental income.  Get full references from tenants and we strongly suggest purchasing rent guarantee insurance if you can.

 

  • Take an oath to become debt free!

If you have savings, great!  You can use your existing savings to reduce your mortgage amount.  Typically most lenders would allow you to clear up to 10% of your outstanding debt without incurring any early repayment penalties.  Other ideas include selling items you no longer require, selling an inheritance, or taking up a 2nd job and using any surplus income to reduce your mortgage debt.

 

  • Check if your mortgage was mis-sold

Before the financial crash, the property market was rising and banks were lending up to 125% of the value of properties regardless of people’s incomes.  There is a real possibility that your mortgage was mis-sold when you applied for it.  Perhaps you were encouraged to take out additional borrowing for a holiday or home improvement loan.  It is worth checking websites like MoneySavingExpert.com, obtaining copies of your mortgage terms & conditions and any mortgage statements you can get hold of.  We can put you in touch with a Mortgage Expert, who can check if you were mis-sold, at no cost to you.

You may be able to claim compensation and in some instances even write off some of your debt.  This will allow you to sell your property and move on with your life.  If this is you, we urge you to get in touch with us today by filling in our Get Your Free Cash Offer enquiry form.

 

  • Lease Option

Lease options are popular for buying and selling negative equity properties in the UK.  With a lease option, we can legal agree to buy your property in the future at a fixed price.  This allows the property market to appreciate and reduce your negative equity.

Providing you have vacant possession, we can service your mortgage payments for an agreed period, typically 3 to 7 years.  You would however need to obtain ‘consent to let’ from your lender, which we can assist with.

All lease option contracts must be drawn up by a qualified conveyancing solicitors, and as a vendor you would need to seek independent legal advice.

We will take responsibility for any minor repairs to the property, for instance if it requires redecorating. We will then let out your property to a professional tenant who will be also be interested in buying the property, and is saving up for a deposit in the interim.

If your property is in the West Yorkshire region, there are a couple of select letting agents that we work with.  We are ready and waiting to buy your property, even if it is in a negative equity. We are looking to buy property in Leeds, Bradford, Wakefield, and surrounding areas. In fact anywhere nationwide!

Video Transcript:

Hello! I’m Stephanie. Can I sell my house fast that is in negative equity? Yes you can!

You probably bought your property at height of property boom? Don’t worry. We can help.

If you are not in a chain, this could be ideal solution for you. We will agree to buy your property at 100% market value at an agreed price in the future say 3-5 years. This agreement will be via solicitors. During this time we will pay your mortgage and insure the property on your behalf. We will rent out the property, and look after it like our own. Within 3-5 years, we will buy the property and give you 20% of any profits if it rises in the value.

Are you paying two mortgages, and two lots of council tax bills? We can take over those payments within 3-4 weeks.

Sounds good? Do you have any questions? We would love to answer these for you.

Why not make an enquiry today to see how we can help?

If you would like more information please get in touch with us today using our Get Your Free Cash Offer enquiry form.

Property Saviour
Property Saviour

Property Saviour are experts in buying your property fast ethically. We will buy your property, guaranteed. Our service is free and we never charge any fees. We contribute an extra £500 towards your conveyancing fees. Whether you have inherited a property, it is an investment, or the property is in negative equity, we can help. Get in touch with us today on 0113 320 6700.

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