Please help me I'm worried! Options for house in joint names with ex partner.

moneyangel22

Hi everyone,

Please give me your advice on my situation as I am desperate and can't see any suitable solution to my predicament.

I bought a house just over a year ago with my ex-husband (we were married at the time). It was £164000 on an interest only mortgage fixed at a reduced rate until April 09. We were paying £640 a month. In April this year he committed adultery and moved in with this woman. From April to August I lived in the house, paying the mortgage and all the bills on my own with no contribution from my ex because we were going to sell it and I was going to buy a new house in my name. We had no luck in the current market so decided to rent it out to cover most of the mortgage while I moved into my new house. We got tenants in September and although the rent doesnt cover all of the mortgage, it was affordable for me (the mortgage went up by 1% when they converted the mortgage to buy-to-let). I was happy with this arrangement for awhile because I was going to arrange for my ex's name to be taken off the mortgage and deeds, so I would benefit from any future gains....this was his idea to ease his guilty conscience. Unfortunately due to the credit crunch I have struggled to get a mortgage in my sole name on this property for 2 reasons;

1. A lot of providers wont lend me as much as I need due to my new mortgage.
2. As its buy-to-let they all want 30% deposit - which I cannot raise!!!

As our current mortgage is fixed until April we will incur £5000 ERC if we redeem anyway so thats another issue. We will just about breakeven if we do sell it...but now we have tenants I am obligated for at least the next 12 months.

I added up my costs so far and with all the mortgage payments and repairs etc during the tenancy so far (Aug-Oct) I have lost nearly £2000 on it.
Going forward I am going to keep losing £200 a month until April and then at least £400 from Apr 09 onwards.

I cannot see that I have any options as I do not want to keep losing money, my ex cannot afford to chip in much at all, he wouldnt get a mortgage on it if he tried....I feel that it was his fault we are in this situation and I felt I couldnt live there....so I just want to make things as easy for me as possible.

My new house mortgage is costing me over £1000 per month and I am really dreading April when this mortgage goes up to over £1200!!!

Please help....any suggestions welcomed....I had a house repossessed 8 years ago for reasons not of my making...and I am scared of it happenning again! I can afford 2 mortgages....if the rates were reasonable..(even if they were both repayment mortgages) .its just no-one will let me have 2 mortgages on my salary (I earn £38250 gross). If I could get a reasonable interest only mortgage on this house it would be ok...but I cant see it happenning.

silvercar

If the mortgage on the existing property is in joint names, then you are both liable jointly for the repayments. It doesn't matter that your relationship has broken down, how you deal with meeting the mortgage payments is a joint responsibility.

.... I was going to arrange for my ex's name to be taken off the mortgage and deeds, so I would benefit from any future gains....this was his idea to ease his guilty conscience.

The cynical amongst us may say that he has got the better deal; he walks away from a property decreasing in value, leaves you with the problem of tenants and an ERC on the mortgage.

A residential mortgage would be based on your salary and credit rating. At the moment think 3-4 times your salary. Most lenders would ignore a let property mortgage if the rental income clearly covered the mortgage payments.

A BTL mortgage would be based on the rental income, generally the rental income needs to be 125% of the mortgage payments, with a minimum deposit of 15%. I suspect it is the rental income that is causing lenders to ask for 30% deposit.

Whether it is wise for you to shoulder this burden alone is debateable. You could still have the let property in joint names and get a mortgage on a residential property on your own.

moneyangel22

Hi silvercar,

Thanks for your advice!

It seems 30% is typical when you look at comparison sites the max ltv is usually 70% to 75%. I have spoken to L&C and the others mentioned on the mortgage advices pages and they all say they cannot loan me over 70%.

Could I get a residential mortgage on the property? if I could get a deal on interest only costing about the same as my current deal then the rent would cover the mortgage. Its only because they added on an extra 1% when I told them we were renting it out, that the rent doesnt cover the mortgage.

I am not sure I want to be tied to him financially for x number of years...but it seems it may be the only way, at least for the next year or so...the problem is he cannot afford to contribute much so I am suffering the costs alone...for now at least. I just want an easy life and would be happy if I could get a mortgage on my own on this property so he is out of my life for good.

silvercar

If you wanted a residential mortgage on two properties, your salary would have to justify both mortgages.

On the let property, it would make sense to have an interest only mortgage. If times are tough in the short term, you could go for interest only on the residential property as well.

moneyangel22

But would I stand a better chance of getting a residential mortgage on this property? and would it be an option as the tenancy has already started? The current mortgage on it started as residential and it was very easy to convert to a buy-to-let mortgage with no problems, they just increased the interest rate by 1%.
The other option is to tell my current provider that I am earning more than I am so they will give me the mortgage in my name - it would just be a straight signover then, just filling in a form. Do they check income? The frustrating thing is that I can afford both mortgages if its just a case of it being signed over and I dont have to put any extra capital in.

Mrs_Chicken

moneyangel22 wrote: »

The other option is to tell my current provider that I am earning more than I am so they will give me the mortgage in my name - it would just be a straight signover then, just filling in a form. Do they check income? The frustrating thing is that I can afford both mortgages if its just a case of it being signed over and I dont have to put any extra capital in.

That's mortgage fraud hon. I do really feel for you, you're in a very difficult position, but this won't help- you could end up in a much more serious situation than you are now.

Your current provider would ask for proof of earnings - if you can't evidence that, you'd be up the creek without a paddle...

cal1_2

Hi:hello:
Sorry to hear about your situation. I see that you are now divorced (you say he's your ex-husband). What was written in your divorce papers about the matrimonial home? I'm afraid I agree with silvercar. It would seem that your ex has moved in with the woman he met - is he contributing to this house now that he shares with her? He can't just walk away from his other responsibilities. Whilst the property is being rented out, he should be covering half of the shortfall and half the cost of buildings insurance (half of your costs!!!!). Any costs of the former matrimonial home (FMH) should be split 50/50 as it is in both your names. As you say, you are losing money on the FMH and it is in joint names.

I hope I don't sound harsh when I say his conscience has not just been eased - it's been wiped out!!! You need to contact him and ask for half of the shortfall at least for the next 12 months you are renting it out.......then I would get the property up for sale, hopefully sell it at a profit and split any profit (more probably loss) 50/50. You say I am going to keep losing ££££, I have lost £x amount. This should say WE have lost........

I would not want all this stress and worry on my shoulders. Please let us know what was agreed in your divorce papers (I can't believe any judge would grant a divorce if finances, property etc etc wasn't sorted/agreed upon).

You sound like a really nice person who has been hurt badly - I wouldn't want anything to do with the house (too many bad memories for you). It's not your problem that he "can't really afford to chip in much at all" - his name his in the deeds he is jointly liable. Don't make it any easier for him, he probably never deserved you anyway - ask him to ask his new GF to help him!!!! Which ever way, tell him in no uncertain terms that you are not putting up with this financial burden for one day longer!!!!!!!!!! You say you want to make things as easy for you as possible? Him shouldering half the debt would be a start!
Kindest regards, I hope it all works out OK for you. Good luck xx

moneyangel22

Hiya,

I arranged the divorce myself as it was 'amicable' we were able to do it online saving money and time. As of yesterday we are officially divorced now. We have not filed any papers to do with the finances yet as this is a seperate issue that can be dealt with at any time, I am told. We did have a consent order drawn up based on the original plan of selling the house, but as we cant do that, they have never been filed...we need to make new arrangements then i will get them formally drawn up and stamped by the court.

moneyangel22

Right...I have seen a solicitor and it was as i expected really...He didnt tell me anything I didnt already know....I dont have many choices.

The biggest problem for me is deciding whether I want the hassle of managing the property as an investment, and whether it is worth the hassle of chasing my ex for contributions.

I am tempted to hand the keys, mortgage, rental income all over to him and let him find the £200 shortfall each month and manage the property....he has never liked paperwork, or making decisions for that matter!

He is not the sharpest tool in the shed either....if i stop paying the mortgage on it I am sure he would pay it to avoid repercussions.

I put the idea to him of contribution 50% of my losses and he said he would but we would have to split the profit on sale....i explained to him that if we sold now we would owe around £20k for which he would be liable for half....i think he is expecting to make a huge profit...off my back! Expecting me to do all the work etc..

I want to make this guy face up to his responsibilities, either by making him sort everything out, or contribution to my losses.

moneyangel22

hi everyone,
here is an update of the situation....went to court and got an order to say he has to sign house over to me and i have to get his name off the mortgage.
The thing is I am now unsure if i am doing the right thing...the house value has decreased even more so probably looking at 25k loss if i sold it....if i keep it i am still making a loss each month after the rental income.
To complicate things further I want to move house...sell my new house i bought recently and possibly buy a house with my new partner....but i dont want any loss from the house with my ex to affect my new relationship/life.
If the house was in positive equity my ex would have had to 'buy me out' so does that mean i am entitled to go after him for half the debt?? makes sense to me? also can i get the court order changed?

Thanks

silvercar

You can get a court order changed by going back to court.

Only you can decide if it is better to take the loss on a sale or to manage having a loss each month.

All very well getting a court order that says you have to get his name off the mortgage, what happens if the mortgage lender won't agree?