Car loan for negative equity
Age: 27
Partner’s age: 28
Annual gross income from employment or profession: 40K
Annual gross income of spouse: ~30k
Type of employment: Me permanent HSE employee, him self-employed
In general are you spending more than you earn or are you saving? Saving
Rough estimate of value of home: 300K
Amount outstanding on your mortgage: 300K. We’ve been paying it off for a year and a half now, initially LTV was 92% but prices have dropped
What interest rate are you paying? 5.1% tracker, 5.35% from Thursday if Jean Claude Trichet gets his way
Other borrowings: Partner has a car loan, 4 years left, fixed rate
Do you pay off your full credit card balance each month? Yes
Savings and investments:I save ВЂ500/month, he saves slightly less, we have 14K currently in high yield deposit accounts
Do you have a pension scheme? Both of us have, mine through work his is a private pension
Do you own any investment or other property? No
Ages of children: None
Life insurance: Level term
What specific question do you have or what issues are of concern to you?
We are generally very prudent with money and have done fine so far. Our main issues are saving to get married (next year hopefully) and moving to a bigger house. What we’d like to know is if we are in negative equity when we go to sell eg house is worth 250K but we owe 300K how does it work? We won’t be able to clear the mortgage on property A with the proceeds from its sale so how do we buy property B and come up with a deposit? It will not be feasible to continue living in the 2 bed house we are in now when we start having children, it might be ok with one small baby but we will need a larger house in the next few years.
