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sorting out a messy mortgage

Hi,

I was hoping for some advice on the best course of action for my girlfriend.

2 years ago she took out a 3 way mortgage with her sister and her sister's boyfriend to buy their family home from their parents. She has never lived in the house and never paid any money towards its upkeep. The house was bought with a 100% mortgage and will now be in negative equity. In truth she only put her name on the mortgage to help her sister buy the house.

Her sister and boyfriend have now split up and he wants out of the mortgage as he wants to buy somewhere else. In the process of taking him off the mortgage they are asking my GF for evidence she lives in the house (which she doesn't have). Ideally my GF would also come off the mortgage but I don't think the mortgage company would allow her sister to be the only person on the mortgage as she doesn't earn enough.

So I'm wondering what the best thing to do is? Should she ask to come off the mortgage? What is the mortgage company likely to do? Thanks for any advice,

-H
«1

Comments

  • Keep the boy friend on the mortgage he has a share in the negative equity.
    Who if anyone is living in the house?
    ...............................I have put my clock back....... Kcolc ym
  • huwy123
    huwy123 Posts: 150 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Just her sister and her (suspicously-quickly-found) new boyfriend. It seems a bit harsh to keep her ex on the mortgage given that he wasn't responsble for the break up. Messy.
  • silvercar
    silvercar Posts: 49,934 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    Say the property was mortgaged at its value of £105k originally. So each person had a 35k mortgage invested in the property. Now it is valued at say 90k which would be 30k each. So the sister's ex wants to unload a 35k mortgage and is "giving" in a 30k share in the property. To do this (excluding any moral arguements) he should make up the 5k difference.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    It woulld be in her best interest to extract herself from this.

    Things to consider

    Currently all three have joint liability for the debt and if the ex comes of and she stays on then she increases her exposure which is not a good move to make it is not in her interest to do this.

    She is being asked if she lives there which she does not.

    If the sister can't take this on her own what about with the new BF that may offer a way out.

    Currently your GF holds can control what happens and should make sure it is in her best interest.
  • huwy123
    huwy123 Posts: 150 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Do you think the mortgage company will allow my GF to come off the mortgage also? What happens if my GF doesn't supple the proof of residense they are asking for?
    To give you the figures the mortgage is for 120k, my GF's sister earns about 18k and I would guess the house is now worth 100k.
  • silvercar
    silvercar Posts: 49,934 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    I would guess they are asking for residence proof to see of your GF has rent to find as well as contribute to the mortgage, making financial difficulties more likely.

    If she can't confirm she lives there, I would guess the lender isn't going to agree to remove the sister's ex. Why would the lender agree to release someone from their obligations if they have reason to believe that the two remaining on the mortgage have other obligations and could soon find themselves stuck.

    Adding the new BF would be a way forward possibly. Could be out of the suacepan into the fire. Why would he want to take on a mortgage liability greater than the value of the house?
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • silvercar
    silvercar Posts: 49,934 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    huwy123 wrote: »
    Do you think the mortgage company will allow my GF to come off the mortgage also? What happens if my GF doesn't supple the proof of residense they are asking for?
    To give you the figures the mortgage is for 120k, my GF's sister earns about 18k and I would guess the house is now worth 100k.

    Over 6 times income? NO.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Conrad
    Conrad Posts: 33,137 Forumite
    10,000 Posts Combo Breaker
    No your GF cannot leave the mortgage unless the remaining parties earn sufficient. A debt of £120k requires approximate income of £35000.

    Your GF could say she intends to move back in and this gets around why her proof of residency is at another address.

    The new application will be credit scored and it could be that fails, perhaps due to the software deducting points as your GF lives elsewhere (the algorythms tend to deduct points for anything 'unusual' as 'unusual = risk').
  • huwy123
    huwy123 Posts: 150 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    So what would happen if the new application fails - everyone will have to stay on the mortgage?

    is there any chance of the lender withdrawing the mortgage because of all this (namely GF living elsewhere).

    -H
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    huwy123 wrote: »
    Do you think the mortgage company will allow my GF to come off the mortgage also? What happens if my GF doesn't supple the proof of residense they are asking for?
    To give you the figures the mortgage is for 120k, my GF's sister earns about 18k and I would guess the house is now worth 100k.

    The point if she can't get out of it then she needs watch her exposure to the negative equity which is only going to get worse keeping the ex on the loan does this.

    Currently your GF is in for £6.6k this jumps to £10k if the ex drops off.

    Sis is unlikely to be able to take this on her own.
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