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How to find out if my house in negative equity?

Posted in House in negative equity, How to sell my house quick | 0 comments

What does it mean “house in negative equity”?

Mortgage brokers,  banks and press talk about houses in negative equity being a real problem at the moment…. What does it mean house in negative equity?  And how do I find: “Is my house in negative equity or not? And if my house in negative equity who will buy my house quick?”

First of all,  what is equity? Equity is an amount of cash you can pocket after you sold your house and paid off the mortgage. When you buy a house, your equity is your cash deposit. Easy.

Now,  when does a house turns into a house in negative equity?  If house prices keep falling, like they are doing right now, then at some point the value of the house will become lower than the outstanding mortgage, so you can say my house in negative equity. In other words, if you owe on your house more than what you can sell it for, than the house is in negative equity.

 

 How to find out if my house in negative equity?

You need to compare 2 numbers:

1. The value of your house or how much you could sell your house for  in the current market. Review similar houses in your area  which were sold recently to get an idea and if you need more reassurance, than get a Valuation report from a qualified Surveyor, like CountryWide.

2. Second number is a total debt against your house: mortgage, loan, other borrowings all put together. Don’t forget to include taxes and other fees which will be paid to your solicitor and estate agents when you sell.

3. If all yours debts together (second number) are higher than the value of the house ( first number), then your house is in negative equity. The negative equity value would be the difference between 2 numbers.

What’s next?

If you discovered “my house in negative equity”, then don’t be discouraged, as if don’t need to sell your house right now, then there is no probem. Just carry on paying the mortgage and when the prices go up again, there will be no negative equity on your house. So in this case, do nothing!

However if you need to sell your house quickly and you are thinking who will buy my house quick, than you come to the right place, as we specialise in buying houses in negative equity. Read Can I sell my house in negative equity? and get in touch!

 

“We believe there is a solution to any property problem and we can help you to find it.”

To your happiness.

Dasha