Moral Question

MoneyMonkeyx

Me and my partner live in his house that he owns with his ex, the house was purchased in 2007 and is interest only. We are in a much better financial position that he was when he brought this house with his ex, however, northern rock do not think so and won't change the names over. We feel a bit naive that we were going to do this anyway as the house is in around £20K negative equity. His ex does not contribute anything towards the house and now wants to force a house sale. We wanted to wait until the fix rate ended (next year) and look for a better deal, then switch the names over and remortgage.

We have been to a solicitor and have been told that we could persue her for the mortgage payments she hasn't paid plus half of the negative equity. The moral question is, is this right and would it be a long process to do?

opinions4u

Moral? Yes. If there was equity I'm sure you'd be receiving demands for a fair share, so it works the same the other way.

Long process? Almost certainly, racking up big solicitor bills along the way. Going to be tough while the lender doesn't want to play ball.

MoneyMonkeyx

It is difficult because on one hand I just want to switch the mortgage over and be done with it as we're not going to move but on the other I would like to be paying less. 100% mortgages are hard to come by though also. Do you think we should be getting half of the mortgage payments off her now?

kissjenn

Two issues here.

One, there is only negative equity at the point of sale, until then it is notional. So not sure how you can chase her for something which doesn't currently exist.

Two, she's not paying her half of the mortgage but I assume you're not paying her rent for her half of the house you're living in. She would be in her rights to counter sue and her solictor would probably suggest exactly that.

I see a lot of solictors fees here over potentially nothing until such time as you sell either through choice or circumstance.

MoneyMonkeyx

I can see both points with their own merits. True, negative equity is something we are looking at because it is a new house and other houses (identical) are up for sale for around £20K less. But I agree, until a house sale this is difficult - unless it was valued? I'm not sure.

All the ex wants is her name off the mortgage but we are left with the negative equity. This is why it is a moral question as is it right to take it on with this and also probably not being able to move to another lender. I'm not too sure about rental income from myself, this is something we would have to look at. However, as I haven't lived there for long, this would be a lot less I am thinking than all the payments she has not paid.

kissjenn

The point about you living there is moot, it's more one about your bf living there. If when they split up she moved out and he remained, he can ask for half the mortgage BUT she can ask for rent during the period he lives there. Someone else living with him is immaterial (financially if not emotionally).

On the negative equity, if you are looking to take her name off the deeds and remortage into your names, she may well want you jointly to take responsibility for the negative equity as part of letting you do this. If you want her to pay half then if she doesn't have the money she may well refuse to sign the papers and you remain in the mortgage v rent scenario. She is unlikely to force a sale to end up with a bill of £10k unless she has that money and she knows you don't.

The problem often in these cases are the emotions they stir up. I know nothing about your circumstances but she may be very angry that you and her-ex I looking to buy her house that she doesn't even live in AND you want her to pay for the priviledge. If this is an acrimonious split then there may be a lot of money about to go to solicitors. Sometimes the easiest solution is a clean sale but both sides would have to fund their half of any negative equity.

Or you live in the house and pay the mortgage until such time a mortgage company will let you remortgage and the market has risen enough to cover the negative. As it was bought at the point the bubble burst it was probably over-valued and you may be sitting it out for a while.

Sorry, very long winded but I think as a couple you may well be on a hiding-to-nothing with the mortgage payments and you should discuss what you ultimately want ie this house, another house, swallow the negative equity, take her to court etc, what all the potential costs and timescales are and proceed from there.