Need some advice please, i'm at a loss!

Bad_life_choices

Hiya all,

I'm new to this board but i'm hoping there is a wiz out there that could offer me some sound advice. As far as i'm aware and according to my bank i'm basically screwed!

Had a messy divorce a few years ago and needed to raise money to make a divorce settlement of about £60k.

Managed to raise the capital by remortgaging with my partner of the time and paid of the divorce settlement (bad joint debt!)

Split with the partner that I remortgaged with and now need to pay her back the £60k so basically the house can go back in her name!

I'v been paying the whole mortgage for the past 3 years, and I havent lived there for the past year. My ex partner now lives there without having to pay any rent/mortgage. So basically I am paying the lot for her.

I want to be able to pay the money back to her coz as far as i'm concerned its my debt not hers. The problem is the bank cant offer me any help as I dont earn enough to get a second mortgage and borrow against a new property to be able to pay her off.

The bank suggests making her an offer of about £40k taking into account the fact that the property has increased in value by about 40k, so my half of the increased equity taken off of the value of the money I borrowed would mean she had to take out a £40k mortgage and it would then be in her name. She only had a £20k mortgage in the first place so is not likely to be happy!

I'm trying to be a decent guy here and sort it all out but I dont have anywhere to turn as far as i can see.! I'm not gonna be able to raise £40k unsecured and I cant get a big enough mortgage in the current climate to be able to have extra capital to raise £40k.

Somebody please offer me some sound advice, coz as I see it now; i'm screwed for the next 22yrs and am unable to move on with my life.!

Thanks in advance.

little_miss_broke_2

Surely she must realise that she can't have what you haven't got?

I'm sorry i haven't got any advice for you, hopefully someone will come along soon and help you out, just sit sit for a monent....

Welcome to MSE by the way, you've come to the right place

skintchick

OK, correct me if I'm wrong, but you added 60k to the mortgage in both your names.

The house is now worth 40k more than it was then.

Your share of the equity is therefore worth 20k more.

You have paid all the mortgage for teh last three years.

SO, why do you owe her 60k still????

IMO it should be less than that.

What exactly did you agree between you when you did this originally?

mummytofour

Sell the house and split the money minus the morgage payments you have made for the last 3 yrs.

skintchick

Yes, i do think the house is going to have to be sold in order to sort this out.

southernscouser

At the end of the day if the debt is in both your names then you are both liable for it but I commend you for taking the responsiblity! :beer:

I take it selling the house is out of the question?

I'm a bit confused about the whole thing to be honest!

Did you buy the place together or was she already living there and your name was put on the mortgage?

You need to work out how much you borrowed, how much you owe now, how much the house is worth, how much you have paid in the last 3 years (how come she hasn't been paying anything?) and only then will you get a more realistic value!

Sorry but I am very confused! :rotfl:

Bad_life_choices

The house was originally in her name with only a £20k mortgage, we remortgaged to raise about £60k to pay off my divorce settlement!

The mortgage about 12 months ago stood at £84k.

The original plan was obviously to be married which meant things wouldnt have been a problem! But I ended up cancelling the wedding after things became too smothering! When you do these things you expect that the relationship is gonna last forever, if you could predict the future things would obviously be different and i'd never have been in this position in the first place!

I always said that the house would remain hers if anything ever went wrong in the relationship.

Selling the house is out of the question unfortunately!

All i'm trying to do is the right thing by her and move on with my life!

CLAPTON

So is this correct
She bought the house herself before knowing you and had a £20k mortgage?

You moved in three years ago and she agreed to increase the mortgage by £60k to help you with your pre existing debts (that had nothing to do with her)?

You have paid the mortgage for the last three years although the relationship broke up a year ago when you moved out?

If you hadn't moved in and hadn't paid the mortgage she would own the house still with a £20k mortgage?

You haven't said why you paid the mortgage but maybe she paid other bills?
In any event most of the mortgage payment was towards 'your 60k ' of the now total of 80k.
Something like this would be fair. Basically she should get back to the position she would have been in if you had never 'borrowed' £60k.
so I think you do owe her £60k without any real claim on the house increase in value, although as you paid the mortgage it might be fair to say the she benefited at the rate of half your payments towards her share (i.e. 20k of the now 80k) for two years and the full amount towards the 20k for the last year. Unless of course you she paid other bills to your advantage.
Morally I think you owe her £60K.

Bad_life_choices

Thats basically what I'v been trying to say! My only problem is how to raise the money to get her back to where she was in the first place!

For the past year she has just had her council tax, gas and electric and telephone to pay. I'm still paying the house insurance and life insurance. For 2 years prior to that I paid everything as I earned a lot more than her.

I'm not trying to get out of paying what I owe her, I just wanna move on with my life but dont know how to! Hopefully there is a financial whiz on here that can advise me.

Its the banks that say offer her £40k, not me! They arent interested in morals, just financial matters!

freeclimber

Forgive me if I'm missing something here, but you say her mortgage originally was 20K, then you raised a further 60K, yet two years on (12 months ago) the outstanding was 84K. How much did you actually increase the mortgage by, and what happened to the rest of the money? I ask only because it might have a bearing on how much you can offset against payments made.

Bad_life_choices

Without seeing the paperwork (which I have no access to) I cant tell you exactly how much it was raised. It was about £90k tops; £20k to pay off original mortgage £70k for everything esle with a bit left over.

Last time I saw a mortgage statement it said there was £84k left to pay.

I'm mortgaged with GE money as I have adverse credit history due to my ex wife, but thankfully no CCJ's