Sticky situation

Reason123

Hello

We bought our first house back in summer 2007.

We bought at the height of house prices with Northern Rock.
It was a 125% mortgage as I had debt and didnt have a deposit.
I know - worst case scenario.

But for the last 18 months, we have always paid in full each month having enough money to fully decorate the house, have new windows and driveway put in.

Here is the tricky situation. Me and my partner have decided to break up. Due to house price crash we are about £50k negative. It was my £12k debt that went into the house in the first place so my partner feels I should take on the whole mortgage.

I should be able to keep up with repayments (Interest only at 6.95% ending Oct 09) although might mean getting a 2nd job to help.

Whats are my options? What do I need to do to get the house soley in my name, is there any help or changes to be done to my bills as I am single person?

Thanks for your help

happybroker

you can get a discount on your council tax if you're on your own. Re the house...do you want to take on that £50k neg eq in your sole name? Speaking to a solicitor would a really good first move IMHO.

beecher

To get the mortgage placed in your name, your salary will need to be high enough to take on the debt. What would the salary multiple be? Could you rent out a room perhaps? You definitely need to get professional advice on this one.

DropBeat

It sounds to me like your partner is being unfair, and wants you to be saddled with the entire negative equity. I am not sure how you can remedy this, but I would suggest the following:

1) Think long and hard about whether you can really afford the monthly outgoings on this house
2) Work out what you are going to do in October when your mortgage comes due and you are in negative equity. You are likely to be placed on a very high mortgage rate, increasing your monthly outgoings

In the end you may only have 1 option: sell the house while it remains in both of your names, split the debt between yourselves, and either service it (come to an agreement with the lender to pay it back over time), or declare bankrupty.

I would HIGHLY recommend visiting a debt advisor - there are excellent free clinics. Find your local one, go along, and have a chat. They will force you to be realistic though, so make sure you have armed yourself with as much info as you can (your incomings, outgoings, mortgage, other debts, current valuation on the house, etc.)

At the end of the day, you need professional advice on this one, not some well-intentioned but possibly misguided internet advice. There is a way out of this, but it is likely either to be very slow and painful (paying off the debt), or fast and very, very painful (bankruptcy). Keeping the mortgage, with huge NE, potentially increasing mortgage payments, and the need to secure a second job to service it, all while it is not even on a repayment, so you are not actually working towards owning it, just seems like an unrealistic recipe to disaster.

jawster

Reason123 wrote: »

Due to house price crash we are about £50k negative. It was my £12k debt that went into the house in the first place so my partner feels I should take on the whole mortgage.

Would your partner be equally keen to walk away and leave you with full ownership of the house if house prices had trebled instead?

If your partner was happy to be joint with your debt in the first place (with no separate legal agreement to state otherwise) then it is also their bed to lie in.

Jacka87

I would definatly say seek legal advice on this one.

However I would agree with Jawster, your partner would probably be happy to split the profits so I think that you need to speak to them to see if they can be a bit fairer. If not then just try get the out of it with as little damage as possible to you.

Good luck and let us know how you get on in with it.

penguine

DropBeat wrote: »

I would HIGHLY recommend visiting a debt advisor - there are excellent free clinics. Find your local one, go along, and have a chat. They will force you to be realistic though, so make sure you have armed yourself with as much info as you can (your incomings, outgoings, mortgage, other debts, current valuation on the house, etc.)

At the end of the day, you need professional advice on this one, not some well-intentioned but possibly misguided internet advice. There is a way out of this, but it is likely either to be very slow and painful (paying off the debt), or fast and very, very painful (bankruptcy). Keeping the mortgage, with huge NE, potentially increasing mortgage payments, and the need to secure a second job to service it, all while it is not even on a repayment, so you are not actually working towards owning it, just seems like an unrealistic recipe to disaster.

This is very good advice. As you are paying only the interest on your mortgage, your situation is likely to only get worse with time, especially if there are further falls in property prices. You should get professional advice quickly.

Reason123

Thanks for the advice. Are there any recommended debt lines?
I have tried national debt line but cannot get through?

silvercar

Unless the mortgage will be less than 4 times your salary, Northern Rock are unlikely to allow you to take on the mortgage on your own.

SO your ex's name will remain on the mortgage. Nothing you can do about that except sell up. In order to sell you need to find the money to repay the mortgage. Northern Rock Together mortgages secured 95% on the property and 30% as unsecured loan. You will need to find the money to repay the 95% plus solicitors and estate agents costs. The 30% unsecured loan can remain after sale, though the interest rate shoots upto about 14%.

beecher

Reason123 wrote: »

Thanks for the advice. Are there any recommended debt lines?
I have tried national debt line but cannot get through?

Have a look here to see if there's anything which can help you

http://campaigns.direct.gov.uk/mortgagehelp/index.html

I'd keep trying National Debt Line though - they're open til 9 tonight.

botchjob

Legal advice! Half that negative equity belongs to him. See how he reacts if you tell him, actually you keep the house....