charging order but need a transfer of equity HELP!!

millymollie

Hi there,
Would appreciate any help / advice !

My husband was previously married, and the mortgage was in his and ex-wifes name. She left and they divorced but the mortgage was still in their joint names although for the last 7 years my hubby has been solely responsible for paying it.
His ex-wife is happy for her name to be removed from the mortgage, and only wants a small amount of cash as there isnt much equity in the property. We have contacted c and g who the mortgage is with, they said we would need to do a transfer of equity. However, my hubby had credit card debt just in his sole name of @6k with nationwide who put a charging order on the property. C&G have said that this will need to be paidoff before they can consider our mortgage application. Nationwide are refusing to offer any discount or leeway regarding the CO.
Ive seen a thread on here saying that CO's on a joint mortgage are just restrictions rather than a full CO, is this correct?
Also my hubby owes about 25k to various credit cards/old loans which he is paying off in small monthly payments.
Im pretty sure than the C&G will decline the mortgage app just based on hubbys credit history, even though he has been paying it himself for years with no arrears.

Sorry this is longwinded but does anyone have any advice re this situation? Much appreciated!!

silvercar

Remortgage elsewhere and take another 6k to clear the charging order.

Thrugelmir

millymollie wrote: »

Nationwide are refusing to offer any discount or leeway regarding the CO.

Why should the Nationwide offer a discount? The charging order was placed due to non-payment of a debt. To release the CO, the debt will need to be discharged.

How much equity is in the property?

millymollie

realistically theres prob about 25k equity in the property.
Would we be better asking a mortgage broker?
Thanks for replies

Thrugelmir

Maybe the best option would be to sell the property and rent. Settle with the ex and repay as much of the outstanding debt as possible. Particularly if the debts are only being cleared very slowly.

Conrad

Not enough equity for a person with his credit profile and amound of debt, unless that is the value of the home is low, such as about £70k, meaning £25k would represent a big percentage chunk of security for a lender, but even then the rate offered would likely be quite high and it would still probably be declined in view of his high debt ratio.

I'm afraid there is no neat solution to this, apart from sell - up and start afresh - but you may have to wait a while before his credit rating rises sufficiently.

millymollie

Hi Conrad
We really want to stay where we are, good area, good schools etc.

Would it help if we went to an independent mortgage adviser? I thought that they could get anyone a mortgage?
Hubby is paying approx £750 a month, balance of mortgage is @110k with 14 yrs to go. We could afford maybe £900 pm max.
Any advice appreciated, thanks

beecher2

millymollie wrote: »

Hi Conrad

Would it help if we went to an independent mortgage adviser? I thought that they could get anyone a mortgage?

I don't know why you think this is the case - mortgages are not nearly as easy to get as they were. You'd be looking at an LTV of 85% to pay off the charging order, and you'd still have 25k of debt which will put off lenders.

Go onto Debt Free Wannabee and get advice on how to pay back your debts as quickly as possible - if you post a Statement of Affairs you should get help on how to cut down household expenditure in order to do so.

Conrad

millymollie wrote: »

Hi Conrad
We really want to stay where we are, good area, good schools etc.

Would it help if we went to an independent mortgage adviser? I thought that they could get anyone a mortgage?
Hubby is paying approx £750 a month, balance of mortgage is @110k with 14 yrs to go. We could afford maybe £900 pm max.
Any advice appreciated, thanks

Not at all - 70% of brokers have dissapeared. The Government regulator, The FSA, places strict rules on lending now so no lender could reasobaly justify the mortgage in view of your partners creidt history. The fact he's paid a mortgage thus far is all but irrelevant to a lender now.

The only 'way out' as it were, might be do declare yourselves Bankcrupt thus discharging all your debt but you'd need to ensure the Bankcruptcy is a once and for all affair with no recource to your future property equity or your car nfor example.

Or you simplly plod on and pay off your debt slowly. Avoid those muppet debt managment plans - they merely ensure your bad debt continues for the life of the plan (say 5 years) plus then you need at least another 3 years after than until your rating improves to get a new mortgage, whereas as Bankcruptcy is over and done with much quicker. Bankcruptcy is no worse than general debt problems when it comes to getting a mortgage, but once the bankcruptcy expires (say 18m), you can set about re - building your credit rating much quicker. Be aware middle men do not earn commision from bankcrupty arranging hence why they all try and flog you alternatives such as an IVA or DMP. I do take a fee for sorting a Bankcruptcy but it seems to be an uncommon practice.

Other option is to sell up, repay all debts and rent for a while and then set about saving a 15%+ deposit.