Husband wants off a 4-way-mortgage!? Very complicated please help.

scoobyfamily

We are newly married and due our first baby in the next 3 months. We are looking to the future of being able to buy our own house instead of renting (as you do).

Problem is:

Husband agreed to sign mortgage papers for a large house worth £450k back in Jan 2005. On this mortgage is also his Mum, Dad & Sister. I have no idea how this works or what kind of mortgage it is but I do know that the sister had her own house and sold it, along with his parent selling their house so they could all afford this big 9 bedroom house to live together again.

I hope this makes sense as it's confusing to explain.

I believe they did put down about 100k of a deposit, although I'm unsure of precise figures.

When my Husband and I were first together (Feb 2007) his sister asked him to sign more papers for a re-mortgage in August 2007. She had "persuaded" him into her way of thinking that it would be better for their future as she was going to buy 3/4 properties to rent out so their would be a better potential for earning more in the future.

She does have approximately 5 mortgages/properties which she lets out and they are definitely not buy-to-let mortgages as she only put down approximately 2-5k to each property and they are all worth approx 95k. Something dodgy is going on.

So he moves out to live with me in a council house because we wanted our own space and refuses to pay his £600 a month contribution as she rented out the "granny flat" that he lived in for approx the same amount and states he wants to buy his own house.

We started looking at buying our own place but I've only owned my business for 3 years so do not have enough accounts for my own mortgage as they want 5 years. So it's down to his salary for the mortgage to be based on - however he can't get another mortgage because of the amount that he is already assigned to.

We checked his credit report on Experian and although he earns approximately 25k basic, the family mortgage was remortgaged to the value of £680,000 when his sister did it in 2007. We were gobsmacked to say the least.

My Husband is well aware now that he should have been more aware of what he was agreeing to, but with a sister who runs her own business and rents out property he believed the whole family would benefit as a result of this re-mortgage in the future.

Then came the credit crunch!!!

He wants off of this mortgage so we can buy our own house however when he told his family this they went through the roof. They then came over to see us just to tell us that he would not be able to take his name off as it just wasn't possible, and that they would buy us an ex-council house as they could get another kind of mortgage. No thanks!!!

The problem is (I think) that they will not be able to prove that they earn enough without his salary on there. Yet they recently just bought ANOTHER property so she could expand her business and now have another premises (Child day care). So I think there is some serious tax dodging going on as they have a lot of cash all the time.

Well done if you're still reading!!...

The house is now worth less than the mortgage (I believe) so I do not know how this works.

His family are threatening us saying if he does it they will need to sell it and they will be homeless.

They already rent out a part of the house and other bedrooms and I know this is usually against a mortgages terms & conditions.

They quite clearly can't afford this pretend luxury lifestyle and we are now suffering because of them.

Can anyone give us any advice what so ever as we are really stuck, we just want a nice house and somewhere to start our life together, without the worry that something could go wrong with her business and money ventures and then the mortgage company comes after him for the house payment when she doesn't have it. Mortgage payment is about £2,500 per month and still has about 22 years on it to go.

We would really really appreciate any advice.

I am going to the bank tomorrow to speak to them about it as it's really getting us down.

jockosjungle

Let them sell up, surely they can get a cheaper house and won't be homeless. How does his parents and sister need a 9 bedroom house?

Does your husband get any profit from this renting venture?

R

scoobyfamily

Simple, they seem to like to pretend they are rich.

No, he does not benefit from any part of this mortgage or any of the other mortgages she has.

His payment towards it used to be £600 per month and they now rent out his part for this. Bear in mind this is Scotland so that is quite a high rental for here.

The reason why it may leave them homeless is because it's worth less than the mortgage just now, so if they sold it then they would be left with approx 120k still to pay - which they want to make him liable for too.

whitewing

I wouldn't go to the bank just yet as you may end up worrying yourself more if you don't know what questions to ask.

Could you gather up all the paperwork and then go and see an accountant (not your sister in law's) to see if you can get some ideas on what to do next? At the very least it may give you more idea of what info you need and what questions you need to ask.

Surely the in-laws (out-laws!) wouldn't be homeless anyway - couldn't they just sell one of the other properties instead.

Senior_Paper_Monitor

For which he will be legally liable I'm afraid !! Although if he has limited assets the bank is more likely to go after, at the final stage, the mother and sister if they have other property assets - but any damage would already be done to your husband in terms of credit rating and future mortgage possibilities.

The simple answer is for the family to sell one (or more) of the other properties, assuming they have a net value after mortgage/sale costs, and reduce their liability so he can be released - but it appears this is unlikley to happen of their own volition.

You need a good (aggresive) solicitor on the case.

This will no doubt cause a family rift but may be better than being caught up in any future issues (the whole project strikes me as 'a pack of cards') - either that or stay renting I'm afraid.

whitewing

Incidentally, this is looking like it may take a while to sort out. To keep yourselves sane in the interim it may be worth making some plans for saving deposits, doing a new budget etc for when baby comes along and reviewing your finances in general.

Just being nosy, what is happening to your business while you are on maternity leave? (I am currently on mat leave, so am interested that's all)

scoobyfamily

Thank you,

We understand that he is liable and are not disputing this fact. He has been stupid or more so bullied into believing something would benefit him when it would not. I'm sure it wasn't explained to him properly and their way of putting it across now is "You signed an agreement, you agreed to do this, you can't just change your mind 5 years down the line". I don't understand how they could ever see this working, as he was of course going to grow up, meet someone get married and have children....and so they expected the new family to live with them too? No thanks. I like to think privacy is a good thing.

We have done all the budget plan for after baby comes and can live a happy life together, the only debt we have is our cars and that's it. We are currently saving for a deposit.

The problem is he has no paperwork, there is only one copy, which the dragon holds in her lair! The only way we could find out the mortgage company would be to go and do another credit check, which we don't want to do.

I obviously have nothing to do with this as I'm not on the mortgage, however now I am his wife I think that makes me liable for his debts if they came after him in the instance she missed a payment.

The other thing as well is that we don't get to apply as first time buyers either which is rubbish! There is quite clearly going to be a dispute but I am unaware of how this road will go.

I am at the bank today anyway as I have an appointment to change my accounts to my married name. So we are booked in to see the adviser also.

scoobyfamily

whitewing wrote: »

Incidentally, this is looking like it may take a while to sort out. To keep yourselves sane in the interim it may be worth making some plans for saving deposits, doing a new budget etc for when baby comes along and reviewing your finances in general.

Just being nosy, what is happening to your business while you are on maternity leave? (I am currently on mat leave, so am interested that's all)

Well you don't completely go "off" as such. I still have to manage accounts, staff etc from home. So it's still work, just not so much of it as I'm passing more onto senior staff to deal with in my absence.

Thrugelmir

scoobyfamily wrote: »

I obviously have nothing to do with this as I'm not on the mortgage, however now I am his wife I think that makes me liable for his debts if they came after him in the instance she missed a payment.

You are not liable even though you are "his wife" for the debt.

Put all your joint savings into your name alone.

Do not buy your home until everything is resolved.

Conrad

Fairly simple solution here; Some lenders will not require him to be off the current mortgage. You'll need minimum 10% deposit for new property. Case has to be placed carefuly - try an experienced broker (not a FA) who knows what they're doing. You going direct would more likely lead to a fail as you wont know how best to present your case as it were. Also anything you say on the phone to a lender is recorded - one seemingly inncoent statment can lead to an unecessary decline.

Good luck.

jockosjungle

So they get £600 rent for his part of the house but still want him to pay £600?

Get the sister to give you one of the houses she rents out to live in?

R