Monday 15th of June 2009
Negative equity is unlikely to cause significant problems unless a loss of income is suffered, it has been stated.
Property expert Malcolm Harrison explained that falling house prices will only cause problems for those who need to sell their home because they cannot afford to pay their debts.
Equity release could also be considered in such a situation, but those who find themselves unable to obtain finance for this purpose may wish to consider non-borrowing options.
These include entering into an individual voluntary arrangement (IVA), but Mr Harrison noted that contacting lenders should be the first step.
"Quite a lot of mortgage lenders, if you lost your job, if you went and talked to them, would try and help you," he said, adding that it is "not in their interest to repossess".
His comments come following Bank of England statistics that showed between seven and 11 per cent of mortgage holders to be in negative equity in the first three months of 2009.
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