John
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Registered: 30th Jun 03
User status: Offline
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I hadn't seen the bit about negative equity. Still irrelevant in amongst the other points though, like actually not being able to rent it out. I skim over most of his posts.
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James
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Registered: 1st Jun 02
Location: Surrey
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I agree it's irrelevant in this case as letting it isn't an option. But Davey is correct in saying that in general if you have negative equity there aren't many good reasons to sell.
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Kyle T
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Registered: 11th Sep 04
Location: Selby, North Yorkshire
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No not in that way, but (I think) I know what Balling is getting at.
Let's say my current mortgage costs me £5 per month. I decide to let it out for £4.50 per month (that's what it would be relatively worth, for the record - I did check).
So that property is costing me 50p a month, after all fee's/insurances/etc.
I then get my new mortgage for £7 per month. Happy days.
Only problem is, when I get an empty let - that's suddenly £11.50 per month I need to pay.
The alternative is I get shut of the existing property, but my new mortgage is £8 per month because I've got a lower LTV.
I know which I prefer, and combining all of that with the fact I'm not supposed to let it out anyway - it's a no brainer.
All of the figures I gave are obviously false, but the proportions are roughly right.
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John
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Registered: 30th Jun 03
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Yes, he would have a case in that circumstance. But, it might be more beneficial to take a small hit on equity at one side, to buy a smaller place with less of a mortgage at the other. Obviously too many variables to speculate though and would depend on exact situation.
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Balling
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Registered: 7th Apr 04
Location: Denmark
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quote:
Originally posted by James
OK but you still said it has negative equity, obviously it will depend on how much NE it is, but the fact it has any negative equity at all means that selling it isn't going to free up any money like Balling suggested.
I thought we were talking about a loss of value, not negative equity.
Obviously that particular argument doesn't hold in the case of NE.
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spencer88
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Registered: 6th Oct 08
Location: cornwall
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New mortgage would be lower than £7 a month though if your LTV is lower.
As in now you say have a LTV of 80%.
Sell house and LTV is then 60% with money invested from other house.
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