Advice needed please - relationship breakdown

Baby_Duck

Hi all,

I hope someone might be able to offer some information or advice to help me understand my options at this time.

My partner and I recently split up and I have moved back in with my parents. My ex and I have a joint mortgage on a property we bought a couple of years ago. Unfortunately, like many others at this time, we are in negative equity. We bought the house for £174k and it's currently worth approx £160k-£165k. We have a 'together' mortgage with Northern Rock (could it get any worse!?), meaning our oustanding debt is approx £156,000 secured loan and £17,400 unsecured loan. My ex is desperate not to sell at this stage as he feels the debt would cripple him. I feel the same way but also accept this may be our only option.

Neither of us can afford the cost of the mortgage on our own and so I am currently paying for half the mortgage and council tax while we work out what to do.

I figure it might be possible for one of us to stay in the house and get a lodger to cover some of the mortgage or find someone else to buy out the other's half of the mortgage. However, neither of us know anyone that might be willing to do this.

Or we could look to rent out the whole property, however rental valuations suggest this wouldn't cover the cost of the mortgage (even if we converted it to interest-only).

I was wondering however if anyone knew of any other options for us? Are there places to go to for help in finding someone who might be interested in buying a half share of a house? Are there companies that would purchase a half share of a house? I've researched shared ownership schemes but can these be applied to existing properties?

I may be clutching at straws here but at 30 years old i'm desperate to not have to sell, take on a load of debt and start out on the property ladder again in a few years time. Plus my poor parents thought they'd finally gotten the place to themselves!

Any thoughts on my situation would be appreciated and thank you for reading my ramblings.

x

Trying_to_be_good

Sorry to hear you having a tough time.

I don't think anyone will want to buy their way in to negative equity, which is what you'd be asking them to do. So you have two options: Keeping the house or selling the whole house.

To keep the house you need to keep paying the mortgage - you say this may be affordable with a lodger? Neither of you will be able to have your name taken off the mortgage whilst it's in negative equity, and until one has sufficient salary to convince HR they can afford it.

Selling will involve paying back NR - possibly each taking a personal loan for the negative equity (and costs of selling). But you will be free from the actual property.

Sorry to not have a better plan than that.

beecher

Couldn't you sell up and pay off the mortgage, and continue to pay off the unsecured loan? If you did get £165k for it (is this a realistic valuation?), you could pay off the mortgage and a bit of the loan. Only thing is I believe the rate of interest you'd have to pay increases, but someone else will tell you if that's true or not.

Alternatively you're both saddled with this into the future, and a clean break is surely the best idea for you both?

Mrs_Bumble

Agree with the above and so if you do not want to sell then probably the most realistic option would be to find a lodger, perhaps foreign language students, if your local hospital is a teaching one maybe student doctors or nurses?

Bassey

Hard luck Duck maybe renting the house out for some time may give you both time to think about what to do.
I too am in a similar position however I have paid all the mortgage payments on our house although it is in her name, I feel I could be left with nothing especially as I signed a form pre-mortgage stating I had no claim to the house

SelbyJay_2

I had to take in a lodger when my friend moved out and it worked out alright in the end. You could advertise for a lodger in the local paper or there even websites that you can use.

If you have a university local, they pay up to £20 a day for student accomm, but this isnt permanent.

getmore4less

You are lumbered with the debt whatever you do.

Even if you found/had someone to take on 1/2 the house they would be mad to take on your debt as well.

If you keep the house you are financially linked untill you sell. do you want that?

If you go down the 1 stays and gets a lodger then you should both continue to pay the mortgage and the one not staying gets 1/2 the equivalent of what the place would rent for.

the debt cannot magically disappear

Baby_Duck

Thanks everyone for your thoughts and comments on my situation. I had a feeling the options would be as I thought - no harm in asking though!

Bassey, I'm sorry to hear you've found yourself in such a situation too. Good luck with yours.

If either of us can find someone suitable to lodge for a while then I think that would be the preferable option for the time being - in the hope that in a year or two house prices have picked up a bit and we find ourselves able to sell without a loss. Luckily, we don't hate each other and so being tied with the mortgage for a while longer wouldn't be the end of the world.

Thanks again for your help everyone x