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Negative equity threat 'overstated'
13 June 2008 10:30
The threat of negative equity has been exaggerated somewhat of late, a mortgage website has claimed, while there are still option open to those homeowners who are affected.
This week, the Council of Mortgage Lenders has warned that 23,000 people who took out 100 per cent mortgages over the year to the end of March could find that, as house prices fall, the amount they still owe on it exceeds the value of their home.
Yet Your Mortgage's editor Pauline McCallion has responded that homeowners who borrowed at a loan-to-value of 100 per cent or more two or three years ago should by now have repaid enough of their mortgage for negative equity not to be an issue.
She admitted that it is currently unlikely that those who owe more than their home is worth could remortgage to a competitive deal, but noted that many former providers of 100 per cent mortgages offer special maturity products for customers in their position.
Ms McCallion also advised anyone who is on a 100 per cent or 100 per cent-plus deal and who wants to sell up to check if they have paid off at least five per cent of their mortgage by now and if not to wait until they reach that target or the market stabilises.
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