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| What is Negative Equity?
Negative Equity is used every time when the market value of a real estate has fallen bellow the price of the loan. If this happens then the loaner can ask the creditor even the loan out with paying him the difference between the loan and the market value.
For example you have purchase a real estate for £150.000, and you have to make a first time deposit of £20.000 now the market slows down and also the prices start to descend. If the market value of the house owned drops below £130.000 then the mortgagee has to pay you the difference while your still paying the loan. | | | | |
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