separation- 2 properties-1 in negative equity

loupar71

Hi,
New here, apologies if this is in the wrong place. My husband and have separated. We will of course be getting some legal advice from a solicitor but I just wanted to put this scenario to the forum.

We have our family home worth about £150K with 40K mortgage outstanding. I want to move out at some point and move away from the area. Will probably rent somewhere. we have 2 young children. Husband doesnt want to sell this house and would rather buy me out. To be honest I dont want any money from the house as I initiated the separation.

The main issue is we also have another property bought as an investment (yeh I know!). This is rented out and is in negative equity. I would say worth about 100K but mortaged for £150K.

Mortgages on both properties are in joint names. I want to make a new life but I dont want to hurt my husband financially any more than is necessary.

Can my share of equity be used to pay my debt in the negative equity property? Do we need to try and sell both properties (doubt negative one would sell) to sort this mess out?

The more I think about all this the more trapped I feel and husband feels the same.

Any ideas???

hcb42

...in effect if your hubby could raise anothee £55K on the main home by remortgaging, to buy you out, he would then have to remortgage the other one using the £55K to pay off the negative equity - problem i would then see if he would also need a deposit on that one..

does the one which is rented out pay for itself - i.e. does the rent cover mortgage and all expenses?

loupar71

it does at the moment as low interest rate but who knows for how long for?

hcb42

is it on repayment or interest only? I.e. are you paying off the capital and reducing that negative equity or not?

If not, it seems like best option is to sell it, and repay the loan from the £55K or whatever share your hubby can buy you out. Does mean you walk away with 'nothing' though. On the other hand, financially that doesnt really alter whether you are there or not.

loupar71

It's interest only. I really dont mind walking away with nothing. I just need a fresh start

hcb42

sheesh, that was a bad investment, however it sounds like you can achieve your aim and walk away with a clean slate without him suffering too much financially

TrickyDicky101

He is going to need a salary of at least £25-30k per year to get a mortgage of close to £100k. Are you taking the kids? Because if you are and you make a claim to the CSA I don't see he will have sufficient salary to service the mortgage on his own (other, more knowledgeable posters may have a better idea of this affordability than me).