Going to apply next week, but before I do...

custard_cream_3

...I just want to double check before I go to the court with my forms next week that my house will be safe.

The mortgage is in joint names, and is £266,000. Two valuations in the past week have both come back with the same result; the house should be worth about £300,000 but in the current market, and taking into account the 3% stamp duty threshold at £250,000, we'd almost certainly get less than that. This would put us slightly into negative equity, so I assume my wife could buy my beneficial interest for a nominal sum?

Also, we're currently paying the interest only on the mortgage (and never missed a payment) but the bank I have the mortgage with will also lose a loan from me when I go BR. Could they demand I go off interest only? It would seem pretty pointless, but it would be good to know. Also, when the fixed rate ends in 2012, could they just boot me off, or would the deal of switching to their standard variable rate still hold, regardless of the equity in the house?

Finally, if it looks like we're heading into negative equity territory, would I actually be best off selling up and having that rolled into the bankruptcy, or doesn't it work like that because it's in joint names?

Yours faithfully
Custard Cream (real name)

skylight

Firstly, the option of purchasing any BI is up to the OR and not you. Its unlikely that your wife wont be offered it given the credit climate, but be aware that its a possibility that it may not happen. It also depends on what your OR thinks your property is worth as to equity - but you need the info to back up your argument.

What I am trying to say is that there is no way to guarantee you that your house is "safe" just the likelihood.

As to the mortgage co, they cannot force you off interest only if thats what you are contracted to do - unless there is something hidden in the small print so check it out. As to when the fixed contract ends, again check your contract/agreement. Most revert automatically to SVRs unless you have re-mortgaged and this may be difficult.

Lastly, no it does not work like that. If there is a debt on the property then this liability will fall to the joint name and is not written off with everything else (unless the joint named goes BR too at some point).

cuddlymarm

Hi

Our house is in joint names and OH went BK in July. So I still own half. Because OH pays all the bills the OR allowed us to carry on the mortgage payments for the time being and has put an order on it so that I can't sell without his permission and vice versa. He is insisting on a valuation (at his cost) and then a) I can buy out OHs equity
b) I can sell it (with his permission on the price)
c) He will take over responsibility for seeling it on my behalf and will try to get the best price he can (apparently if the bank took over they would get buttons for it)
I don't think they can force the issue for the first 12 months and won't want you homeless but if there is any equity they will want it and of course you and OH need to be able to pay for it

I hope this helps. Other ORs may do it differently but this is our story. Before you go BK you need to answer all these sorts of questions and don't do anything until you are certain

Cuddles:rotfl:

custard_cream_3

Many thanks both of you. I'm certain there's no equity in the house and to be honest, because of the remote nature of where I live, the only two estate agents who have a clue as to values around here are the ones I've asked to value it this week! Therefore, even if he got a higher valuation, I think my information is pretty watertight. Probably helpful (to me) that prices look set to continue their drop.

I take the point about giving my OH the option to buy the beneficial interest, but I guess the alternatives are he forces a sale and gets nothing for it, or I get to keep my half of the beneficial interest?