Help! Please! Seperation and our joint home?

guigy

Hi,

I've been seperated from my partner of 10 years for just over 3 months. It wasnt my decision and i was asked to leave the family home that we shared with our two children. My ex partner is now resident in the property with our children. We purchased the property for £185,000 just over 5 years ago. The property is now minus equity to the tune of £90,000 - £100,000. For the last 5 years we have been paying interest only.

It appears that there is little possibility of reconciliation so i need to start looking at my options. I still own a seperate property which has been on a buy to let for the last 5 years. Although this property is not in minus equity, we did release £30,000 from it to pay for the property we shared. I currently have a mortgage of £77,000, (£30,000 of which is released equity) which equates to 100% of the value of the property

I would like to change the buy to let mortgage into a standard mortgage and start paying off as soon as I move back in a few weeks time.

My dilemma is this. As we are minus equity in the shared property and my ex partner cannot take on the mortgage on by herself.

Am i right to think that I will not be able to remortgage my own property while a) I have a LTv of 100% b) while I am still named on the shared property?

I am also concerned that my ex partner will not be able to pay the existing interest only mortgage on her own. Naturally if she defaults on the payments I am still liable, correct?

My ex partner has suggested that she can (on the advise of her solicitor) have an agreement drafted by a barrister which states that she will take full responsibility for the mortgage and in return I will make no future claim on estate.

Now i'm no expert but this sounds like a load of bull to me. My understanding is that the mortgage lender wont give a ball of blue about any agreement and still hold me liable in the event my partner cant pay.

I'm so confued, can anyone out there help, please!

Thanks

nearlyrich

I am not a lawyer but I think you are correct about the mortgage company being able to go after you if the ex can't pay, they won't usually release a joint mortgagee if the other party is unable to afford the mortgage on their own, this is a very big financial decision get legal advice is my best advice.

Thrugelmir

guigy wrote: »

My ex partner has suggested that she can (on the advise of her solicitor) have an agreement drafted by a barrister which states that she will take full responsibility for the mortgage and in return I will make no future claim on estate.

More likely that you will retain liability for the mortgage debt (in the event of default) but have no claim to the title of the property.

holly_hobby

Ok - your BTL property. You will be unable to remortgage to a residential whilst your LTV is 100%.

But you can speak to your BTL lender, and see if they will let you transfer to a residential product (if it is now to be your main residence). But, in changing it from BTL to residential (with loss of rental income), your lender will want your income to be sufficient to service this mortgage (and any other financial commitments inc your existing morgage). Give your lender a call for a general "what if" chat - to see how they would manage the change, then you can make your decision as to whether to just leave your mge as it is until you are in a position to remortgage. (also don't forget to advise HMRC that the property is now your main res (for cgt purposes) ).

The existing mge lender on your ex-residence, will only allow for you to be released from the liability, if their income is sufficient to service the mortgage on its own - until that time you will remain party, and both jointly and severally (singularly) fully liable for the mge debt.

A Barrister would not draft any such deed, the Solicitor will perform this task - and unless your name is removed from the mortgage any such document (with regards to her accepting full responsbility for the mortgage) would be worthless in any event. However, the aspect of you declaring that you will place no charge on any proceeds from the property wouldn't - so it would be foolish to enter into any such agreement in any event (unless of course you don't wish to benefit from any proceeds realised on sale ?).

Hope this helps

Holly

guigy

Hi,

Firstly my apologies for resurrecting my own thread, secondly thanks to all those who responding to the OP the advice was greatly appreciated.

It's been 7 months since my last post and since then i have moved into my own property. Unfortunately, my precarious mortgage position has not made any progress.

In a failed attempt to negotiate some sort of settlement without solicitors i engaged with my ex in mediation services.

I weas wondering if someone could clarify something for me.

During the mediation sessions it was suggested to me that perhaps i should be willing to accept and sign the document waiving all future claim on any equity there may be in the joint property in the future. In realtion to that - if i did sign the agreement and my ex-partner could not keep up the repayments and the house was repossessed then we (jointly) would not be pursued for the shortfall debt after the sale of the property by the lender (northern rock in this case)???

surely this cant be right...??

Can anyone shed any light?

Many Thanks

Dave_Ham

Lord knows where you are getting advice from as it is terrible.

Firstly - did you say the place is worth a £100k with a £185k mortgage on interest only??

Do not sign anything - you will waive rights to equity and then if she defaults you will absolutely be liable for the debts. If there is negative equity they will still look to recover the full amount on an unsecured basis if you sell or the property gets repossessed...

Sorry

guigy

Dave_Ham wrote: »

Lord knows where you are getting advice from as it is terrible.

Firstly - did you say the place is worth a £100k with a £185k mortgage on interest only??

Do not sign anything - you will waive rights to equity and then if she defaults you will absolutely be liable for the debts. If there is negative equity they will still look to recover the full amount on an unsecured basis if you sell or the property gets repossessed...

Sorry

Thanks for this...

I just needed clarification on what i already believed - i feel i'm being press ganged into things.. I think i'm going to withdraw from mediation it doesnt seem to be achieving anything...

Finally... can someone clarify - can i just expect to be tied financially to my ex for the rest of my life - what i mean is... if my ex continued to make payments on the mortgage and didnt default - is there a point in time that she could make a legal move to withdraw my future claim (without removing the remaining liability for any outstanding debt)?

Thanks for this people - i'm confused and stressed...

ACG

So long as your both on the deeds and mortgage your both liable for the mortgage payments and you both have a claim in the property.

Are you on amicable terms?
If you are then maybe you should both sign to say you will no stake any claim in each others property, however that would change if you have to make any payments on the property but only to the tune of what you pay.

That way if she cant afford it then she will not be too worried about asking you for help. This will hopefully protect your credit file.
It also means you can pay down your mortgage and that is safe and sound for you. - Im not sure how legal that would be. If your worried she cant afford the payments on the mortgage how can she afford a barrister?

Tricky situation, which i dont think there is any way out of it - its just a case of making the best of a bad situation.