Mortgage tricky one..

danielwhitehouse

Hi all,
Someone I know recently broke up with her fiance of a few years of which they had a mortgage on a house together.

They clearly don't want to live together anymore, but still have the house together. The house has been on the market for some time now, but is not selling. Even if it does sell it will probably be in negative equity and they will have to find the difference.

Do you guys know of any quick fix solutions to getting rid of the house or the mortgage? One of them seems to think that they can take their name off the mortgage, but it means heavy fines and court fees. The other seems to think that will go bankrupt if they get re-possessed.

I'd really like some useful information I can pass on to them if at all possible.

Thanks in advance.

hcb42

There are no magic bullets.

If one could afford to buy the other out, and live in the property, that is probably the best solution, although it doesnt sound like that is doable.

I would drop the house price, sell it, and clear the negative equity, and chalk it up to experience.....to go bankrupt over this is not ideal at all

originalmiscellany

Depends on the time frame.
Fastest - to sell at auction but you/they may only get say 60% of the value of the house but it would be sold speedily.
Fast - Stick it for sale but lower the price by 20% lower than other houses and you should sell it quickly, but at about 80% of its value.
Slow - One person buys the other person out.

As Helen says it's not going to be a speedy process to get the money out efficiently - which is what you want to see - and with house prices on the decline over the next few years, I fear it'll be a painful process no matter which way you look at it.

FinAdv

As suggested by others, having a mortgage is a very big responsibility and there are no short cuts to get name off it.

Its hard to sell property in this market depending on the condition of the house and the area.

I think they should act very sensibily here. Even though they have their differences, they really have to sit down and discuss on this matter.

They are both jointly responsible for the mortgage and if they try to run away from it, this will affect their credit scoring and any chances of getting mortgage in the future. There is no point paying heavy fines, court fees or going for bankruptcy. I think both should just pay their shares till they can actually sell the house.