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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

Aibu to be annoyed that we can't get a help to buy mortgage because of negative equity

29 replies

Purplepoodle · 17/01/2014 20:18

We have a home which is in quite a bit of negative equity, it's really too small for our family and we need to move. We have saved a 5% deposit (that's took us two years to save) but the only 4 bed properties in 10 miles of where we live are new builds which require a 20% or more deposit.

We found that we can't take in the governments help to buy scheme as we would have to rent out our current home as even if we sold the negative equity outstanding would be to great for us to get a mortgage for a new house.

I know I'm probably being unreasonable as we are lucky to have a home ect but renting out our old home wouldn't make us a profit, it would barely cover the interest only mortgage and we would only hold onto it until house prices come up so we could sell.

I just really want to move

OP posts:

babywipesrcool · 17/01/2014 20:23

If you are in negative equity the last thing you want is a big debt to the government on top of a big mortgage. Also house prices might not "come up" for 20 years or more.

splasheeny · 17/01/2014 20:24

I don't really think its realistic of you to expect government help.

You don't really have a 5% deposit when you are in debt.

Maybe use the money to build an extension?

AwfulMaureen · 17/01/2014 20:30

Listen...when you're in my position you can moan. I have a rental and NO hope of owning...ever. I will always be at the mercy of landlords and never have a home to call my own unless a miracle happens. YABU. You have a home which is yours. I can't get a council house because I "have a home" I can't get a mortgage as ALL my money goes on extortionate rent...which is more than most people pay for their mortgages...and I can't get a home with the government scheme as I am self employed.

Sallyingforth · 17/01/2014 20:32

You are not being at all unreasonable to be annoyed - anyone in the your position would naturally be annoyed.
But getting into negative equity is a risk you take when you buy a house with a mortgage, and I'm afraid you will have to live with the consequences. Sorry!

SybilRamkin · 17/01/2014 20:36

The help to buy scheme is for people who have no hope of getting on the property ladder without government help as saving a deposit is impossible. It is NOT to help people who would like a bigger house. I feel sorry for you that you're in negative equity, it must feel crap, but there are far needier people out there than you.

CrispyFB · 17/01/2014 20:38

We were in negative equity for many years in a house far too small for our needs. We overpaid on the mortgage for a long time to the point where we could sell with no debt. Then we moved into a nice big rented house, and we're saving up for a deposit again. It isn't going to happen any time soon that we can scrape together 5% plus stamp duty, but at least we're in a much nicer area and have a lovely bigger house for the time being, even if it isn't ours really.

Annoyingly just after we sold our last place, prices in the area shot up 20% (we sold in May) and we'd have had our deposit by now if we'd stayed another year. But such is life.. on the flip side we are so much happier out of our old house and an extra year there would have been horrific!

NatashaBee · 17/01/2014 20:41

This reply has been deleted

Message withdrawn at poster's request.

littleredsquirrel · 17/01/2014 20:43

As others have said, you don't really have five per cent deposit though do you because you have a debt that is greater than the value of your house which will need paying off.

McFox · 17/01/2014 20:43

You are being massively unreasonable. You have a home! Just because you want someplace bigger doesn't mean that should be entitled to help - if you can afford to save a 5% deposit in 2 years then you don't need help.

You could be in my position, stuck renting with a baby on the way. We can't even afford to move to a 2 bed place because rents are extortionate where we live.

You don't need help, so suck it up , deal with it, and don't expect help when you really shouldn't get it.

Original poster

Purplepoodle · 17/01/2014 20:44

AwfulMaureen

If you show three years of accounts of being self employed then I think you do qualify

www.helptobuy.net/faq's

OP posts:

Original poster

Purplepoodle · 17/01/2014 20:49

Knew I was being unreasonable but oh dragged me to look at houses when I knew there was little hope of moving.

Crispy - your right about how things go. We were offered council housing when we first moved to the area but chose to buy a starter home. If we had chose council house instead we could buy the bigger home now. Must admit we are looking at renting a bigger house but seems like a gamble.

OP posts:

soverylucky · 17/01/2014 20:49

This reply has been deleted

Message withdrawn at poster's request.

breatheslowly · 17/01/2014 20:58

Interest rates could go up. That would leave you in a mess if you rented out your current house and were only covering the interest on your mortgage.

I think the first thing you need to think about is reducing your mortgage as soverylucky suggests.

Original poster

Purplepoodle · 17/01/2014 21:00

Ok I'm being very unreasonable. There will alway be people worse off/better off than us

We were/are saving to pay off current mortgage as it's interest only and can't be changed due to negative equity (until last month when oh took me to see the house we had once dreamed of and then went to the financial advisor who said it may be possible).

In my head we will just keep saving and review when we have saved the 20%. If moving isn't an option then the savings will over pay the current mortgage.

OP posts:

Original poster

Purplepoodle · 17/01/2014 21:02

Iv always been the utterly sensible financial person I the family (until oh seduced me with the gorgeous, bigger house - he's a bad bad man lol)

OP posts:

JoinYourPlayfellows · 17/01/2014 21:03

"The help to buy scheme is for people who have no hope of getting on the property ladder without government help as saving a deposit is impossible. It is NOT to help people who would like a bigger house."

The Help to Buy scheme is there to start another pointless and destructive property bubble, and it's working.

People are absolutely using it just because they would like a bigger house.

But YABU, it's bad enough that the government is guaranteeing mortgages of people who banks don't think are a good risk without guaranteeing the mortgages of people who are holding onto another property in negative equity.

HotPanda · 17/01/2014 21:06

I don't think YABU to want/need a bigger house. Maybe for wanting someone else to help you get it, but it's not unreasonable to grow as a family.

Negative equity is miserable. I'll grant you that one.

ProfessorDoredumble · 17/01/2014 21:21

sybil you are wrong. I know 3 couples who have accessed, and moved into houses using help to buy. They all wanted bigger houses, and already owned property.

Each to their own, but personally I wouldn't want the government owning any % of my house.

As another poster put it, it's being used to create another housing bubble.

breatheslowly · 17/01/2014 21:33

Could you consider moving into rented accommodation at some point? Might you be able to apply for a council house?

annieorangutan · 17/01/2014 21:56

How many bedrooms is your current place?

maddening · 17/01/2014 22:25

help to buy is for new houses - first buy is for first time buyers - though I think that there are more restrictions for existing home owners

Viviennemary · 17/01/2014 22:30

It's miserable being in negative equity. But you can't really take on more debt. I think all these government loan schemes and rising house prices will end in tears for a lot of people.

maddening · 17/01/2014 22:45

yanbu op - we are in the same position but probably not so much in neg equity now as we have a repayment mortgage so have been chipping away at it - zoopla puts our house at £6k over our mortgage but I can't see it making much over £5k below what we owe and then selling costs make it impossible. Been unable to save due to childcare but ds is 3 next week so that goes down by half at easter and my loan finishes in May plus a pay rise and bonus in Feb so we might get started on saving a deposit.

the only way we could rent ours out and buy somewhere else is by turning our current home in to a buy to let which would be £100 over the rental price and we would still need a deposit for the new place and I think the restrictions on help to buy mean it is not possible - can't remember the actual restriction off hand. We would then port our 2.5 % rate to the new property.

it's the feeling of being stuck - having the choice to move without having a ,massive debt still and pay to rent somewhere - just renting would be fine - my sister's mortgage provider allowed her to rent her flat out without changing the interest - we initially hoped to rent ours out - which on our current rate would just cover the mortgage - we would also have to insure and maintain it - we would then rent somewhere else. And that isn't without risks eg empty periods.

but as it is we can only move if we can save a deposit and the put ours up for sale and to let and just go with whatever comes first.

the other problem with negative equity is that I can't leave my tracker - no longer on a fixed rate (thankgod as the rate is currently good but we had a few years of being on a higher fixed rate so have been v unlucky there (thought was being responsible fixing for longer) but I can't go out and remortgage to a goo rise rate as I have negative or no equity - we are v vulnerable to the interest rate change - and then no choice but to sit tight - it may be for nothing if the rates go up sooner rather than later - we can pay into our mortgage to provide the equity/deposit and hope.

HesterShaw · 17/01/2014 22:51

AwfulMaureen, we just got a Help to Buy mortgage and we're self employed. It can be done, even though we had to jump through a lot of hoops. The rate is obviously not as good as others out there, but it's doable. Good luck.

OP, you have a home already.

HesterShaw · 17/01/2014 22:52

Help to Buy is not just for new homes.

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