Do you wonder if you are in Negative Equity but don’t fully understand the meaning? Not to worry – this is completely understandable.
In less complex terms: Negative Equity occurs when the current loan or mortgage balance secured on a property is higher than the current market value of the property.
An example of this would be when a borrower’s current mortgage balance could be €150,000 but a recent comparable property may have sold for €100,000. This borrower is in Negative Equity and therefore faces a shortfall of €50,000!
We at EU Property Solutions know of many who purchased in Spain at the height of an inflated market pre-2008 taking on a huge amount of debt, which later left some of them in financial difficulty. Plummeting values since 2008 have left many facing the very real problem of Negative Equity on foreign property.
Many who own a property in Negative Equity feel trapped and unable to move on, being dubbed “mortgage prisoners”.
Owners in Negative Equity fear the threat of crippling debt if they sell, which makes them feel trapped in the property, unable to sell. Our main focus is to help these owners.
So many borrowers feel the only option is to wait until house prices rise. However, the market may never recover to the peak prices of the boom years. Waiting indefinitely for prices to rise, and having to make high mortgage repayments every month in the meantime, many owners feel they are in a real financial pickle, to say the least.
EU Property Solutions know there are options in place for borrowers in Negative Equity. We work with a variety of lenders across Europe and can tailor our services based on your circumstances and lender. You are not a mortgage prisoner and we can find a way out of your predicament.
Call EU Property Solutions today on 0330 124 1230.
* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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