Joint Mortgage Get Out!

Newtothise

Hi,

I split up with my partner 18 months ago and he moved out of our jointly owned house 9 months after. I have been paying the mortgage on my own since with the help of a lodger.

Th break up was amicable and he is doesn't want to own his share of the house anymore. The house is about 5 grand in negative equity and we currently have a 100% interest only (Stupid I know but we bought at the height of the housing boom) mortgage. He is happy for me to take over full ownership of the house.

The question is will my bank (northern rock) allow it? I have had a significant raise in salary since we took out the mortgage which more or less equates to what our joint salaries were when we took out the mortgage (in 2006). I have no savings so cannot reduce the LTV and although my parents have said they will be guarantors for me they are both retired (their house does have a lot of equity in it though).

Will I have to remortgage? If so there is no way I will be able to get another 100% mortgage right?

My ex is very bad with money so I don't want to be tied to him financially as I worry about how I will get credit in the future if I need it.

I have good control of my finances and can prove this.

Any advice on this would be appreciated.

_Andy_

Without knowing the figures it's impossible to say.
What is your gross annual income and what is the mortgage balance?

pinkteapot

You do have to remortgage. Banks won't let you simply remove a name from a mortgage. You essentially have to re-apply as a sole applicant, taking out a mortgage which pays off the old mortgage.

If you are correct that the house is in negative equity and you haven't paid off any of the original capital then no, you won't be able to remortgage as there are no mortgages available in excess of 100% these days. 90% is likely to be the limit (some 95% products may have returned but the interest rate would be horrendous).

In order to remortgage you need to have enough cash to pay the difference between your current mortgage balanced owed and the amount you can borrow on the new mortgage.

Your ex wants nothing more to do with the house but this is his responsibility just as much as yours. Assuming the house purchase was joint, you should be buying him out if you want to keep it. Since it's in negative equity, he owes you money!

Newtothise

Hi Andy and Pink Tea Pot,

Thanks for the quick replies.

I currently earn £29950 a year but I am on increments so this goes up by £500 a year minimum. The mortgage balance is £135000 although £15000 is an unsecured loan.

I had the house valued around 6 months ago and they said I would likely get £130000 for it but could get up to £135000.

I don't want to sell if I can help it but would really like his name off the mortgage. If that is impossible can I get him to sign something that says he has no interest in the property and would that stand up in court if I sold later and made a profit?

GAH

Hi OP,

Unless you can get together a minimum of a 5% deposit (limited lenders out there though) then you are not going be re-mortgage as you have no equity.

If you sell at the moment you are going to innevitably be owing money.

Would you be able to be able to afford to pay more for your monthly mortgage?
If so, it might be worth speaking to your lender to see if you change to a re-payment mortgage to start paying down the mortgage.

Not that you need me to tell you, but interest only mortgages are only good if you have a repayment vehicle running alongside it.

pinkteapot

Newtothise wrote: »

If that is impossible can I get him to sign something that says he has no interest in the property and would that stand up in court if I sold later and made a profit?

Only a solicitor can answer this, and draft such a document.

kingstreet

pinkteapot wrote: »

You do have to remortgage. Banks won't let you simply remove a name from a mortgage. You essentially have to re-apply as a sole applicant, taking out a mortgage which pays off the old mortgage

That's not totally accurate. The lender will vet you as if you are a new borrower to ensure the affordability is acceptable to them, but the transfer of equity process involves the removal of a party from both the mortgage and the title deeds.

To the OP - all you can do is ask Northern Rock for details of their transfer of equity process and see if it's feasible. Expect costs of around £400 to complete the transaction if you can get lender approval.

Newtothise

kingstreet wrote: »

That's not totally accurate. The lender will vet you as if you are a new borrower to ensure the affordability is acceptable to them, but the transfer of equity process involves the removal of a party from both the mortgage and the title deeds.

To the OP - all you can do is ask Northern Rock for details of their transfer of equity process and see if it's feasible. Expect costs of around £400 to complete the transaction if you can get lender approval.

Thanks Kingstreet. I'll give that a go.