Mortgage Transfer

mymite060708

My wife and I have divorced and I want to transfer the house into my sole name. She has agreed to do this for nothing as we tried selling the house without success.

My provider-the Co-op have agreed I can take over the mortgage on condition that I own 15% equity in the house, I currently own about 9%.

so to complete the transfer I need to pay around 15K off the mortgage as a lump sum. My only option for doing this is taking out a personal loan over a couple of years at a rate of about 8.3% my current interest rate is 1.04%

I can afford this loan and would like to stay in the house + within time the value should go back up and might be easier to sell.

is there any thing wrong with this plan?

Cannon_Fodder

The problem with doing as you suggest, is that there is a possibility of further falls in house prices, so you may well get back nearer to no/little equity.

When you come to re-mortgage, a lender will do a credit check and not be happy about an ongoing personal loan while you try for what might then be a 95% re-mortgage...

Can you do a re-mortgage at the same time as the mortgage transfer, perhaps fixing for 5 years to give a better chance of values recovering?

I know this might be painful, losing the 1.04% rate, but presumably theres a finite period of time that it will apply for, anyway...

Should your location need to change for job, or other reasons, you will be ploughing money into something that you cannot get back out easily...

How about just tolerating the joint names, and paying the two years worth of "loan payments" - but direct to the mortgage company as overpayments, saving the 8% interest and improving your equity position...

You could see a solicitor to draw up an agreement which protects your position, and get your ex-wife to sign it.

mymite060708

Cannon_Fodder wrote: »

The problem with doing as you suggest, is that there is a possibility of further falls in house prices, so you may well get back nearer to no/little equity.

When you come to re-mortgage, a lender will do a credit check and not be happy about an ongoing personal loan while you try for what might then be a 95% re-mortgage...

Can you do a re-mortgage at the same time as the mortgage transfer, perhaps fixing for 5 years to give a better chance of values recovering?

I know this might be painful, losing the 1.04% rate, but presumably theres a finite period of time that it will apply for, anyway...

Should your location need to change for job, or other reasons, you will be ploughing money into something that you cannot get back out easily...

How about just tolerating the joint names, and paying the two years worth of "loan payments" - but direct to the mortgage company as overpayments, saving the 8% interest and improving your equity position...

You could see a solicitor to draw up an agreement which protects your position, and get your ex-wife to sign it.

thanks for the info. Makes sense as I am fixed into my current deal for another 2 years anyway

will a solicitor be able to draw up a document them ensures she has no right over the property or equity during the two years even though her name has to remain on the deeds and mortgage?

chemgirl1

Hi,

I am also wondering whether documents can be drawn up without removal from mortgage documents, I wasn't sure if this would be possible as if the mortgage wasn't paid, the person removed would still be liable?:rolleyes: