Think you can't sell your house in Negative Equity... Think again!
Negative Equity is when the value of an asset used to secure a loan is less than the outstanding balance on the loan, this is also referred to as being “Under Water”. Check out our “What Is Negative Equity?” section for more info.
As a result of the recession, the NI property market has been greatly affected by Negative Equity. It has been one of the greatest challenges faced by the banks and the borrowers who are trying to deal with their legacy debt.
The fact remains that a borrower's personal circumstances can change. Your payments may have become unaffordable as a result of a change in your employment status. You may have now had a family and outgrown your “starter” home. Whatever the reason, being stuck in negative equity when you need to sell your home puts you in a difficult situation - but there are solutions to this problem.
A common misconception for borrowers is that you cannot sell your house if it is in Negative Equity and this is quite simply incorrect. You will need the lender to consent to sell the property if the sale price is not going to exceed the debt. It is also important to note that the lender will request you repay the remaining debt.
The debt left over is known as a “debt shortfall”. The lender will expect a borrower to put in a proposal to address this debt shortfall and this can include full payment or part payment to settle the full liability.
Debt is an affordability issue, so you can only be expected to pay what you can afford to pay. Payment can come from your monthly disposable income for an agreed period of time or payment from a lump sum you may receive, for example from a family member or friend.
The team at GDP Equity Experts successfully presents repayment proposals to banks and other lenders day in, day out. Have a look at some of our Success Stories. The banks and lenders have acknowledged that the best solution is obtained when they work amicably together.
The eventual outcome is always subject to a borrower's personal circumstances but debt can, and has been, successfully written off outside of a formal insolvency process. This may or may not affect your credit rating. We at GDP call this process Mediation.
So if you are a homeowner, a landlord or business owner in Negative Equity in NI looking for some real, honest, expert advice, please do not hesitate to get in touch with GDP Equity Experts for solutions.