Want to leave a mortgage

hellokitty08

Hello

I currently have my house on the market becase my partner and i just split up, however I am desperte to leave and want to be taken off the mortgage and rent somewhere. How easy do you think it will be for me o sign over to my partner? His happy to take it on if he can. We have had the mortgage two years he earns just over £32,000 a year, current mortgage is for £115,000 property for sale at £130K. He earns plenty to make the payments and is thinking of getting a lodger , but is it realistic to expect them to let him take full responability for the mortgage? If not what can i do short of going bankrupt?

lisyloo

I'm not a broker but it works out at 3.6 times salary, so I would have thought he should be able to get the mortgage on his own.

Are you stuck on a deal with redemption penalties?
If so you are stuck with your current lender, so you need to ask them if it's possible.

If you don't have penalties then you could look at remortgaging anywhere.

If not what can i do short of going bankrupt?

There is a bit of lee way to drop the price (although of course you will have to pay the estate agent).
The market is pretty dead right now but could you drop the price a bit below similar properties?

Another option is to agree between you that he will pay the mortgage on his own and you will get off it as soon as you can.
This carries risks for him but he could keep records of all payments for proof in future.
You would need to come to some arrangement about the existing equity.
Perhaps you could agree for him to keep the £15K equity as the outlook is for falling prices anyway.
Are you on decent terms to come to some arrangement like that?
It carries more risk for him rather than you.

hellokitty08

I am considering droping thr house prce to really low now. We are just about coming to our wits end with each other and although i like to think if i kept my details on he would continue with the payments, but I also feel like he might take me for a ride Run off and leave the house without saying. fairly unlikely, but a posibilty none the less.We do have £5000 of penalty fees.

hellokitty08

Hi,

My partner has been in touch with the mortgage company today and been told that he passed their preliminary eligibility checks and they will send him the paper work to transfer the details, so that the mortgage is just in his name.

Now im thinking that this might just be too good to be true. He also said that he was told "we'd just have to pay solicitors fees for the change
of ownership"

Might I really be able to get the luckiest escape of my life? ? ?

If anyone has been in a similar situation or helped process some similar cases, i would be very grateful to hear from you.

lisyloo

Now im thinking that this might just be too good to be true.

Providing he meets the criteria for income then there is no reason why it shouldnt be in his name only.
There will be some solicitors fees but we are talking £200-£300 ish

Might I really be able to get the luckiest escape of my life? ? ?

Looks like it.
From what you've said there is about £15K equity in the property, but in your posistion I wouldn't argue over it.
In the current market it's a liability and not an asset, so he is taking the capital risk.

DaftMule

If he takes on the mortgage I presume you have some sort of agreement for you to get your share of the equity in the house (assuming there is some) when it sells? If that is the case, have you checked this situation with a solicitor?

I would think this is a bit of a mine-field area (but I'm not a solicitor so don't know...) If the house does not sell for a year or more, he is going to effectively own more of the equity of the house than you as he would have been paying the mortgage alone for a year...so you start getting into complications of value due to each party.

I don't know but I'd think you'd want to approach this hand over of the mortgage to him with a certain amount of care....

lisyloo

If he takes on the mortgage I presume you have some sort of agreement for you to get your share of the equity in the house (assuming there is some) when it sells?

I am assuming he is going to stay and get a lodger, but equity calcualtion (asuming sale at £130K) is £15K minus estate agents fees and £5K early redemption penalties.

In a falling market my advice to the op is "run, run as fast as you can".
Do not slow this down in anyway.
The picture I have is running away from a car crash behind you.
If you slow down the process there is a risk the house price could fall to no or negative equity.
Believe me in the current market you are getting the good end of the deal.
All IMO of course.

If the house does not sell for a year or more, he is going to effectively own more of the equity of the house than you

I think he's staying there are getting a lodger.
He will have ALL the equity and that's likely to be neagtive IMO.

I don't know but I'd think you'd want to approach this hand over of the mortgage to him with a certain amount of care....

Run, run as fast as you can.................

Offer to split the fees and let him keep the equity.
(Offering to pay ALL the fees might look desperate and we don't want that).

morg_monster

Yes a sol's agreement is technically probably wise, but that also means she's liable for part of the debt if it doesn't sell, or sells for less than they paid for it? Lots of hassle involved there if she retains an interest in the house, she'd have an interest in the sale price etc and have to stay in contact with her ex over the sale of the house etc perhaps arguing over whether to accept an offer etc.

Negative equity is a perfectly likely outcome in this market. If the OP just wants to be shot of it she may be happy to forgo a share of equity since there's really no guarantee much money will be made off the sale (especially with a £5000 redemption fee). If the partner is not able to sell without going into nequity (did i just make up a new word), without a separate agreement presumably he cannot start chasing the OP for a share of the debt, if the mortgage has just been put into his name? Personally atm I'd be more worried about that possibility than worrying over a few grand of equity, if I was in this fairly distressing situation. All depends on how bad the OP will feel for her ex if the house does not sell... would he be happy to sit tight for a while?

DaftMule

lisyloo wrote: »

Stuff.....

Run, run as fast as you can.................

Offer to split the fees and let him keep the equity.
(Offering to pay ALL the fees might look desperate and we don't want that).

Depends where you live. No sign of a house price reduction where I live.

Don't forget the OP is going to have to come up with quite a bit of cash as deposit etc for a rental property (unless she has a private contact so no agents involved). Giving away a possible £5,000 is going to be hard to swallow (well, it would for me!) but it all depends how desperate the OP is to leave her past behind.

Is the house in joint names??

lisyloo

Yes a sol's agreement is technically probably wise, but that also means she's liable for part of the debt if it doesn't sell, or sells for less than they paid for it?

This is not my understanding of what we are talking about here.
Perhaps hellokitty can clarify but my understanding is that mortgage & house are put into partners name totally.
This means that hello kitty is no longr liable in any way.
The solicitors fees are for dealing with the change of name on the title deeds and the charge on the property NOT for any arrangement between the parties.
Once hello kitty is off the mortgage and title deeds then they are not liable for anything related to the house.

If the OP just wants to be shot of it she may be happy to forgo a share of equity since there's really no guarantee much money will be made off the sale

This is exactly what I am suggesting.
£130K is an asking prices and houses that are selling are mostly not reaching anywhere near asking at the moment (in most areas).

All depends on how bad the OP will feel for her ex if the house does not sell... would he be happy to sit tight for a while?

Perhaps hellokitty can confirm but I read it that he is going to get a lodger and LIVE there and not sell.
This is an alternative to selling.
But we need calrification on that as it seems we all haven't read it the same way.

Depends where you live. No sign of a house price reduction where I live.

Yep, agreed, it's relative, but in many areas they aren't selling or are taking a large discount to sell e.g. 25%.
Don't forget that this house has NOT sold for £130K which implies that it's not worth that inthe current market (although we don't know how long it's been on for).
The equity is small and my suggestion is that she escapes before he has a change of mind/heart.

Giving away a possible £5,000

This is best case.
Property isn't currently fetching the asking price (and you haven't included the estate agents fees).

happybroker

ring your bank and make an appointment to speak to a mortgage advisor (both of you should go really).

if the bank won't do it (or your not tied in to the existing deal) then speak to a good whole of market broker who will let you know once and for all if it is possible or not, at least then you will know where you stand.