MORTGAGE LOANS
NEGATIVE EQUITY & MOVING HOUSE

Despite sporadic reports of a "recovery" in the Irish economy, well over 200,000 Irish home owners are still in the uneviable position of finding themselves in negative equity in relation to their property loans.

If you are in such a financial position and yet you really want or need to move to a new larger or smaller house, the future may look bleak.

However a piece of good news is that the new Central Bank rules (currently restricting second time borrowers to
a mortgage limit of 80%), do not apply to negative equity
homeowners.

So some of these those negative equity home owners,
who are not in arrears with their mortgage lenders, may
be able to persuade their banks and lending institions
to grant them new mortgages, allowing them to move.

The big problem here is, of course, that the negative equity home owners will be increasing the level of total debt they owe, but if they really feel the need to move, (and they are able to repay an increased total mortgage), at least there are options available to them.

The table below show the how much the major mortgage lenders are prepared to grant those home owners in negative equity. (But ONLY to those home owners that the banks have judged are in a position to repay the new increased mortgage amounts.)

The table illustrates the loan to value multiples offered by the banks. The loan-to-value (LTV) ratio is the term used by mortgage lenders to calculate the ratio of a loan to the value of an asset purchased, in this case the new house.

AIB LTV	EBS LTV	BOI LTV	KBC LTV	Ulster Bank LTV	Permanent TSB LTV
1.75	1.75	1.75 (Self Builds 1.25)	1.75 (Trading Up) 1.25 (Trading Down)	2.00	1.25 (Trading Up) 1.75 (Trading Down)

Negative equity home owners desperate to move always have the option of trying to rent out their present house and rent in a new location, but they may run the danger of losing their tracker mortgage if they do this.

Read: Thinking Renting Your House? Don't Lose Your Tracker Mortgage

This summary is based on a recent article in the Sunday Independent Newspaper.

All information provided by IrishHouses.ie is for general guidance only, is subject to errors and omissions and does not constitute investment, tax, legal or other forms of advice. Always obtain independent professional advice for your own particular situation.

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