Negative Equity

The issue of negative equity, which first raised its ugly head in the 1980s, is when the value of the outstanding mortgage exceeds that of the property. This happens when the property market dips and houses and other buildings lose their paper value. Should this happen to you, after you have just taken out a mortgage, the important thing is not to panic! Negative equity is only a problem if you want to sell the house or you want to borrow more money against it. If you keep your head down, and continue to pay off the mortgage according to the agreement, the stock market will shift again soon, putting the value back into your home!