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Could I lose my home because of negative equity abroad?

Negative equity can often be confusing to deal with, but especially if it concerns a house abroad. Often, expats will be told by their lenders that they are in negative equity when they try to sell; that the current market value of their home is less than what they paid for it, meaning that selling at the current market value will leave them with less money and often means they cannot afford to pay the full amount that was originally lent to them.

This means that selling their foreign property will only cover some of their outstanding debt they owe to the lender. If these homeowners cannot keep up with mortgage payments as they attempt to sell on their property abroad, they could find their place in the sun repossessed by their lender.

However, this is often not the end for expats. If they still owe money to their lenders after a property is repossessed, many think that they can pack up and leave the country and that will be the end of the matter; they can return to Britain poorer but slightly wiser about the dangers of properties abroad. But foreign lenders can pursue them for the outstanding money through the UK courts.

The most worrying thing is that lenders can apply for an order against assets homeowners have in the UK—including their British home. This can often result in debt collectors being ruthless about collecting any assets and hounding families who have no means to pay, especially with the demands of bills and mortgage payments in the UK.

Ignoring the orders and hoping the debts will go away without taking any advice or action can often result in the worst being threatened; losing a ‘safe’ home in your home country because of mortgage debt accrued abroad.