Separation/Northern Rock/Negative Equity etc...

SDW22

Hi all I have go tmyself in a right old mess, here goes...

Two and a half years ago I bought a house with my partner with a 5 year fixed rate Northern Rock Mortgage, the relationship has since broken down and I was hoping some users may have been through this situation and can give me hope that there is life at the end of the tunnel.

We currently owe £135k, which is split £106k secured and £29k unsecured with 28.5 yrs left on the term. The house is estimated at £115k now.
I have looked at a few options:
Renting it out, NR said no as I dont own enough equity and the rent wont cover the mortgage repayments. BTW I can actually afford the house on my own but again NR said no!
Putting my Dad on the mortgage instead of my partner, again NR said no as my Dad would be 82 at the end of the term.

I have visited a solicitor who has recommended selling privately and renegotiating individual deals with NR for the remaining unsecured debt so I can cut all ties with my ex. This sounds all good but how long will it take to sell - who knows?! Will she be awkward - Possibly. I have looked on here at voluntary repossession is that an option? I assume we would still be sent a bill for the negative equity bit but could we arrange separate bills? This option looks like would could avoid contact more when/if it starts to become awkward/nasty.

I allready have debts for the usual £7k car loan and £4k credit card, would this added to the negative equity bill be enough for me to get 'help'? IVA? Bankruptcy?

Any help/advice would be great.

Thanks,

SDW22

Nonshy

Can you not try and sell the property and leave the unsecured... you will have a loading on the rate of 5% or 8% but means you can both try and move on.

Voluntary surrender is not something I would advise.

Senior_Paper_Monitor

On the limited information given (any formal advice would need much more detail -and I am not qualified to give it) you should not have "IVA / Bankrupcy" on your list, nor should "voluntary repossession" be there.

If you can, as you quote, "afford the house on your own" then there are ways to handle this situation - but it may well take a few years (but not as many as the previously mentioned alternatives will screw your credit rating - and life - for).

I really can't understand what your solicitor is suggesting!

You need a good professional advisor capable of 'thinking out of the box' and willing to 'negotiate with Northern Rock'. Not always guaranteed to work (and there is no way NR will release any part of the 'joint and several' unless they are covered).

Split mortage (possibly part shorter term - so your Dad could be involved), interest only (subject to repayment vehicle), partner contribution to 'buy out' negative equity responsibility, move to lender who will allow 'lodger income' and many other options should be considered.

Good luck

SDW22

Thanks Nonshy, this is the 'ideal' option providing we can be amicable. If the OH decides to become awkward, refuse to sell etc etc then voluntary surrender would be my next option - I think!

Senior Paper Monitor, I should have mentioned that although I can "afford the house on my own" I dont really want to as the house is 50 miles from where I work. We bought the house half way (time-wise) between our places of work. I will however look into the other options you have suggested - Thanks.

Gorgeous_George

Getting a mortgage together is a bigger commitment thab marriage. Buying a house that suited neither party was incredibly stupid. I'm often amazed at the decisions people make.

Renting it out without permission is an option but not ideal. I would sell but I like SPM's suggestions. Whatever you do, you need to do together. Your ex needs to understand that the problem will not just go away. I fear that reposession and bankruptcy will be the result here but it is not a soft option (spineless perhaps) and doing it voluntarily does not make it better.

Seek more legal advice. Sort the relationship out if at all possible.

And good luck.

GG

Phil777

Hi,

Sorry to hear about your situation. I like others would only look at voluntary repo as last resort. It will screw you for 6 years I believe (someone correct me if I'm wrong) as you'll be on the repossession register.

To get a clean break selling seems the only option if neither of you want to/can take on the mortgage alone. If you market the property the lender can block the sale if they don't agree with the price/negative equity. However you can go to the courts to get an order that will allow the sale to go through. Assuming you have decided a 50/50 split of equity (or negative) already you can then pay the lender back via cash, a loan from someone else or with them and your ex the same. I am not sure whether they will make it separate liabilities or not though. It'd be worth calling them to find out. They have a department that deals with this sort of thing but you may have to arrange them to call you back.

Hope that helps, it's not a nice time and it may take a while to sort. The important thing is to keep it amicable and talk about it. don't let it become the elephant in the corner as it were.

Alternatively you could both stay living in the house, pay down the mortgage and hope the market picks up then sell in profit.

Good Luck.

Senior_Paper_Monitor

If you want to move, it might be worth looking at a house swap arrangement with someone in a similar position (if you can find someone) or where a balancing payment could be used.

NR might consider it in the right circumstances and properly presented.

As G George stresses - this case could easily lead to reposession and bankruptcy if it is not handled properly and with co-operation of both parties (if it goes wrong both will suffer - neither will simply be able to walk from their responsibilities). Every possible alternative needs investigating, defining and considering - the only good news here is that there may be sufficient income to support a number of options.

SDW22

G George,

Just for my own sanity I feel I need to defend my "incredibaly stupid decision", hindsight is a wonderful thing and yes looking back it was stupid, especially trusting and using NR. At the time we were working 70 miles away from each other both renting hence 2 x Rent, Gas, Water, Elec, C Tax etc etc... at not seeing much of each other, we had been together 4 years at this point and lived togther before so buying/renting together didnt look like a problem. We decided to buy 50 miles from my work and 20 from OH's work so both journeys would take approximately an hour, I had a company car so fuel was no issue.
Now looking back now after being togther for 7 years, loosing company car, having to buy one (hence car loan) and an OH who became addicted to spending on Credit Cards we shouldnt have bought but I suppose everyone who has separated from someone can look back and think - Why did I do that!!

Sorry, I just felt like I had to put that down in writing and I agree that this could end up very bad for me/us with bankruptcy/reposession and it wouldnt help either of us in the long (or short) term.

Thanks,

SDW22

Hugbubble

SDW22 wrote: »

it was stupid, especially trusting and using NR.

I feel for you, I really do, but don't understand why it is is Northern Rock's fault? They didn't force you to take out the mortgage, surely

SDW22

Granted the mortgage was not forced on me/us and at the time everything was fine. I was refering more to how NR are operating now, they are highly unflexible in helping people who are now in situations where they need help/flexibility. We havent over stretched ourself on the borrowing front (mortgage wise) and if the relationship hadnt broken down we would be fine. There is also another post on here were a couple are moving abroad for work and their housing situation is the same as ours and NR are still unflexible.
If we were with another lender there are more options available (or so I believe) but we are not so I am going to have to live with it.

ANY_CHANCE

SDW are you sure you could not just keep paying the mortgage for now, or has she insisted she wants to sell?

My husband and i are separated but i am in the house and paying the mortgage as it would not be to either benefit if we tried to sell now we would lose the deposit we put in. He is renting and happy with that.

PS no matter what some may think, we all make mistakes