Family trapped by negative equity
Negative Equity Solutions | Feeling Trapped?
There are a number of reasons why our clients need to move house but due to negative equity are stuck in a situation they feel is impossible to resolve. The word impossible is not in our vocabulary here at Negative Equity UK. We do everything in our power to make the impossible possible.
To demonstrate our can-do attitude, this is a recent example of a case we have settled on behalf of a lovely family stuck in negative equity.
Stuck in a starter home
We recently helped a couple who bought a property in 2007 as a starter home, their first steps onto the property ladder. Since purchasing the property, however, they had two children and their family no longer fit in the house.
They needed to move to a bigger property, closer to the city and their family support network, but their house was in £64,090 of negative equity, so selling it wouldn’t cover the outstanding mortgage, let alone pay for a deposit on a new home.
The couple felt they were stuck in a situation they may never be able to get out of, that’s when they decided to contact us.
What were the options?
A number of options are available to our clients and their lender, Santander, in this case. Our role was to find the best option and reach agreement about this with the bank.
The first option was repossession. This was the worst option for both the owners, who would have had a greater residual shortfall to pay, and the bank, who would have made less than market value had they sold it on and would have had to pay significant costs.
The second option was for the owners to let the property. This would have left the family vulnerable to financial losses if the property were to be vacant for any length of time while they were paying to live elsewhere.
The last option was a shortfall sale, with the owners paying £10,000 to Santander as a full and final settlement. The bank agreed to this settlement, which allowed them to minimise the loss they suffered on the mortgage and avoid the cost of repossessing the house.
How we can help
While the £10,000 settlement may seem like a lot of money, it is significantly less than the outstanding value of the mortgage and allowed the young couple to move on and begin to rebuild their finances, without the mortgage.
If you’re in a similar situation, stuck in a property that is no longer suitable for you or your family, unable to move due to negative equity, we can help. We’ve written off an average of £71,000 for clients like the family in this case.
Contact us and book a FREE consultation! We are always here to make the impossible, POSSIBLE!