Ok need some advice about mortgage

jodenice

i saw a thread about this but its not quite the same so I hope you don't mind if I write my query too.

My boyfriend and I are splitting up. We have a mortgage together and bought this flat a couple of years ago. We are tied into a fixed year deal that doesn't end until 2013. The mortgage itself was for 25 years all in.

He is happy to sign off the mortgage and take name off of the flat. However, my wages are roughly £33K and the outstanding mortgage is about £125K. Together we had enough to afford it. Singley I'm not sure they will accept me.

The flat was bought for the sum total of £135K. other flats in slightly better condition are being sold for about £15k more in this street. The prices don't seem to have fallen that much round here.

There are large penalties attached to finishing the mortgage early.

I am worried that if I talk to them about taking his name off the mortgage, i will have to reapply, they will refuse me and i will have to sell the flat, possibly ending up with a debt if it falls under negative equity (i've not had it valued so don't know how much it will sell for).

I've also had bankruptcy in my distance past (although more than six years ago) and although I have been paying the mortgage fine and could continue to do so, I think in these times i do not look an attractive prospect.

My ex has said if this will be a problem that he will stay on the mortgage with me (but not pay) - this is obviously in his interest as any negative equity debt would fall between the two of us. However, i can't and don't expect him to have his name on it for very long.

please help, I'm really losing sleep. my mortgage is with accord.

happybroker

If you apply to Accord for the mortgage to go into your sole name and they say no you will not be expected to repay it, it will just stay as it is now (I think that's the answer to one of your questions.

Paying the penalties to move would most likely take you out of the scope of any other lenders due to the loan to value ratio and at high ltv's you do need to be squeeky clean.

Accord charge £200 for a transfer of equity (which is what you are looking to do) but they don't say on the website if this is payable if they decline your application.

Standard income multiples for Accord are 3.5 x salary which leaves you a little short I'm afraid assuming you have no other debt.

Speak to them, this will do you absolutely no harm what so ever. The worst that can happen is you are in the same situation you are in now and at least you will have a line in the sand from which to start making plans for the future.

Sorry I can't be more positive.

poppy10_2

He can't simply have his name "taken off" the mortgage. You will have to buy him out, by applying for a mortgage for the whole of your property yourself. If you cannot afford this, then your only other option is the status quo, wherein he continues to own his share of the house and is jointly and severally liable for the mortgage payments.

jodenice

thanks very much for the advice, I'll phone the mortgage company today.

happybroker

poppy10 wrote: »

He can't simply have his name "taken off" the mortgage. You will have to buy him out, by applying for a mortgage for the whole of your property yourself. If you cannot afford this, then your only other option is the status quo, wherein he continues to own his share of the house and is jointly and severally liable for the mortgage payments.

if you agree to him being taken off the mortgage and the bank is happy to lend to you in your sole name he can simply have his his name taken off. If you are in agreement between you that no money is to change hands you don't need to "buy him out".

jodenice

Gah i just phoned them

I'd be £10K short!

How frustrating.

According to them my options would be

a) Find the missing amount from somewhere and pay that off
b)get someone else added to the mortgage (but they would have to live there!!)
c) redeem the mortgage and sell the house
d) leave his name on it.

i give up.

Spangled

Is the flat a two-bed? If so, could you get a lodger in to rent the spare bedroom? If you can get income from a lodger (get up to £4,250 tax free a year under the rent-a-room scheme: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804), Accord may accept that as additional income. eg you get £4k a year from renting the room, thereby pushing your total income to £37k - which should mean you can take the mortgage out on your own...

jodenice

That is a really good idea, i never thought of increasing my income.

Sadly, i have a dog who is not friendly, any lodger would have to be locked in their room for their own safety.

But something to think about anyway, thank you.

jodenice

so my ex has just contacted me with the proposal that he stays on this mortgage (for the time being) but that I get another joint mortgage with him so that he can get his own flat. his wages on his own will not show as high enough to get him the mortgage he wants although he will be able to afford the monthly payments. he also said we could contact a solicitor re the different mortgages but this wouldn't hold any water would it - we'd both still be liable for both mortgages.

What is the likelihood of this even being possible? And would he have a far better chance if i manage in some way to take him off the mortgage and leave him free to apply without having this hanging over him.

I'm so very confused. Is this a good idea?

silvercar

Forget it. Why do you want to be liable for a mortgage on a property that you have no interest in? Why do you want to have a further joint liability with someone who is your history?

I doubt a lender would give you both another joint mortgage while you still have the current mortgage.

He would have a better chance of his own mortgage if his name wasn't on yours. If he can find the 10k necessary to remove himself from yours then let him do it.