relationship break down, advice needed for housing

betmunch

Please can someone help with the situation below.

There is a couple, we shall call Mr and Mrs Munch to protect the innocent. They have a Baby Munch as well.

The relationship has gone down hill and have now decided to split up, all very amicable and both wish to help the other get on in life. There will be no issues over Baby Munch.

Mrs Munch would like to leave the family home with Baby Munch and get a place with the council. However the council have said that she will not be accepted as she is on a joint mortgage with Mr Munch.

The mortgage company does not consider Mr Munch able to service the loan himself so dont want to remove Mrs Munch from the mortgage.

There is a lot of debt in the Munch household, which is being maintained so no real worries there. The only issue is with housing.

Mrs Munch cannot stay with Mr Munch in the long term.

What can Mrs Munch do?

If she were to rent privately would she get help from housing benefits? Or would they too be declined due to owning a home?

I have told Mrs Munch to contact CAB, but thats where my knowledge ends!

RecoveringAlcoholic

Advice from CAB on relationship breakdowns.

http://www.adviceguide.org.uk/index/your_family/family/family_factsheets.htm



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silvercar

Well long term Mrs Munch will want her name removed from the mortgage and it sounds like short term she would benefit from removing her name. So Mr Munch needs to sort it. Either he takes the mortgage on alone or he sells up. If the lender won't let him take the mortgage alone he could try and find a new lender that would consider him. Otherwise he needs to accept he can't keep the home.

Is there a second Mrs Munch in the picture yet? Who may be prepared to go on the mortgage?

poppysarah

Mrs Munch needs to speak to Shelter I think.

Selling or both stopping paying the mortgage is probably an easy option.

Can Mrs Munch stay in the house and Mr Munch leave? Who's servicing the debt? Is it all theirs?

betmunch

Mr Munch cant sell the house due to the negative equity, also the same reason Mrs Munch cant come off the mortgage or a remortgage cant be done.

All debts are being serviced. Stopping paying the mortgage is not an option, nor is stopping paying some of the other debts.

There is no new Mrs Munch

Mr Munch expected to leave the family home, but Mrs Munch decided she would rather leave.

Shelter is a good call, thank you both for suggesting it.

Since the original posting I have been informed that Mrs Munch will be able to claim Housing Benefit on a private residence even while being on the mortgage at the family home due to the negative equity, although the situation will be reviewed every 6 months and as soon as the property is out of negative equity it will have to go on the market.

Is there anything that could be suggested?

poppysarah

betmunch wrote: »

All debts are being serviced. Stopping paying the mortgage is not an option, nor is stopping paying some of the other debts.
Shelter is a good call, thank you both for suggesting it.


Is there anything that could be suggested?

Can debts be serviced and savings made which could be put towards NE?


If Mr Munch stays and gets a lodger is technically half of that Mrs Munch's income and would disallow her benefits?

(And take care to consider the possibility of NE growing rather than shrinking)

PasturesNew

Mr Munch can continue paying for the house/bills - and buy a shed and a long extension lead ... and move into the garden.

betmunch

If any savings can be made they will go towards paying the unsecured debts as they have the highest interest rates first, unless the Housing Benfeit people insist otherwise.

It is likely that a lodger will be brought into the equation, and money from the lodger will go towards the joint debts.

There is a shed, but it needs a new plastic window! Uninhabitable I'm afraid!!!

silvercar

Theoretically Mrs Munch should be paying half the mortgage but Mr Munch should be paying Mrs Munch half the market rent for the property. In order to afford this Mr Munch could take a lodger. Mr Munch has all the bills of the place. Plus Mr Munch is presumably paying maintenance for the baby munch. In fact Mr Munch now has a lot of expenses and needs to think carefully whether he can afford to stay in the property.

Is marriage guidance not an option?

If Mr Munch can't afford to stay and Mrs Munch doesn't want to stay, could the property be let out?

On the mortgage front, some lenders are allowing properties to be sold in negative equity and arranging unsecured loans to pay back the shortfall. Worth an enquiry?

PasturesNew

Second hand touring caravan in the driveway. Ideal. Long extension lead.

betmunch

Couldnt fit a touring caravan on the drive, but thanks again!!

Guidence was considered but the issue is not one that can be compromised on, its either happening, or it isnt.

Property could be let out, but then rental would not cover the secured debt and costs would increase due to having to pay rent on a further property for Mr Munch.

Mr Munch is taking on all the debt and believes he will get by with income from a lodger, which in turn allows Mrs Munch to have enough money to get the nice things that Baby Munch deserves/needs and have a little left over to treat herself with. Maintenance is considered payed by relieving Mrs Munch of the burden of the joint debt. Mr and Mrs Munch agree on this.

Mr Munch has thought carefully about staying in the property and will not be selling at this stage. If the situation worsens then selling will be as likely then as it is now. If the situation improves then the selling of the property will happen when the value exceeds the secured debt as per the rules set down by the Housing Benefit people