Homeowners in negative equity may not benefit from mortgage rescue pack
Homeowners in negative equity may not be able to benefit from the Government’s rescue package worth £200 million as they may be excluded critics warned. If homeowners are in negative equity (where the value of your home is worth less than your mortgage), then this group of homeowners are unlikely to be able to benefit from this package.
This may put additional stress upon homeowners as they could face repossession or having no choice but to sell up.
Due to house prices falling over the last year, this has resulted in many homeowners being left with their properties worth less than their mortgage value. There are thousands of homeowners in this situation with many more at risk if property prices continue to fall.
As the housing association will only be willing to pay the market price for the property, there could be a problem for homeowners faced with negative equity. Homeowners could still be faced with huge mortgage debts which could prove very difficult to pay.
“If a homeowner is in negative equity and they are accepted for the scheme they are going to have to pay rent and repay any outstanding mortgage debt,” said Sarah Robson from the Council of Mortgage Lenders.
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