Owe 90% or more on your property? Struggling to sell because you bought at the peak? Overloaded with a remortgage? Moving with no equity in your house (or very little) is still possible. Essentially you have three alternatives.
First you can try to sell on the open market, but this may mean taking a loss. This will leave you out of pocket since you will have to pay lenders the deficit out of your own pocket. But you may be lucky and achieve a sale at a level which leaves you free and clear. Just.
The second alternative is to rent your property out. This is a viable option if you’re staying locally, and the rent will cover your mortgage/loans. But you are essentially deferring the sale of your property and are still liable for repairs on your property while it is let.
The third alternative if you owe more than 90% or more on your property (or are possibly in negative equity) is to take advanatage of a scheme offered by some property buyers. Solicitors draw up the agreement as with a normal sale but it differs in some important respects.
First you agree to sell at some point in the future for today’s market value (broadly). In the meantime the person who agrees to buy your property takes full responsibility for the payments due on the house and repairs. Now the draw-back of this scheme from your point of view is that the buyer only takes “an option” to buy. In the final event they may not. But if property values increase in the future they are likely to because your property will have increased in value. And in the meantime the prospective buyer is taking full responsibility for the property with your lenders consent. A big plus however is that your likely to get more for your property than if you sold today. Typically these schemes run for five or six years, but in some locations it can be less. And it also depends on the kind of house you have.
Each alternative has pluses and minuses. The important point is that moving with no equity (or a little) is possible. So if you owe 90% on your property or more, it’s worth investigating all the alternatives.