Negative Equity


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Negative Equity

A situation in which one owes more on a loan used to pay for an asset than that asset's current market value. For example, if one borrows $100,000 to buy a house and, for whatever reason, the value immediately drops to $60,000, the homeowner is said to have negative equity. Negative equity is most common after the burst of an asset bubble. One with negative equity is said to be upside down in the loan.
References in periodicals archive ?
Declining negative equity will allow almost a million newly freed homeowners who have not yet refinanced or have been waiting to sell to do so before mortgage rates rise, which will likely happen in coming weeks.
Negative equity can occur because of a decline in home value, an increase in mortgage debt or a combination of both.
7 percent of the negative equity in the country, according to CoreLogic.
metro areas are stuck with residents who have high rates of negative equity.
The North East and Northern Ireland were the only areas where the danger of tipping into negative equity is still seen as a more serious concern than rising values in the property market.
The HomeOwners Alliance's report found that the North East and Northern Ireland, where prices have only recently started to stabilise, were the only areas where the danger of tipping into negative equity is still seen as a more serious concern than rising values in the property market.
In Northern Ireland, 41% of borrowers - 68,024 households - were in negative equity at the end of 2013.
The study by David Duffy of the Economic and Social Research Institute and Niall O'Hanlon of the Central Statistics Office showed hundreds of thousands of families have fallen into the negative equity trap.
Total negative equity fell to $689 billion from $691 billion in the first quarter.
Nationally, the total mortgage debt outstanding on properties in negative equity increased from $2.
In the past when trading a vehicle, customers were expected to pay off or finance negative equity.
Northern homeowners have also seen much steeper rises in negative equity than those in the south and accounted for two-thirds of an overall rise from 3.