Paying off negative equity separately

Calvera

Hi,

I was hoping from some advice if possible from people that may know better than me!

Bought a house 4 years ago with my (now)ex-girlfriend - 40%, with a housing association having 60%.

2 years or so ago, we split up - since then we've had an agreement that suited us both - I rented elsewhere, she had first a family member then a new bloke paying my share and therefore the mortgage was being paid. The house was in negative equity so in effect is was something to help us both to get to a point where we could sell far easier.

Sadly she's now having to move jobs so we're looking to sell. It's in negative equity. My question is therefore if we sell, can I pay off my half of the negative equity and have my ex's half as a separate arrangement etc?

As an aside, I could only afford to pay half of the rent/mortgage if I now moved into what is an empty house (which I'd really rather not, but no way can I afford my rent and the half on this house), has my ex still got a responsibility to pay the other half until the house sells despite not living there?

Thanks in advance!

Joe_Bloggs

Without any legal background or experience I would say the selling parties are going to have to co-ordinate the repayment of the possible negative equity together. You will each need a solicitor.

The housing association may be able to offer advice. They may even want to help sell or even buy the property. It sounds like a very tricky situation to be in.

J_B. (I could be wrong but it bumps up the post.)

Thrugelmir

Starting talking to your lender as soon as possible. Most lenders are open to separate negotiations with the parties involved. Providing your are reasonable, 50% of the negative equity isn't uncommon as a settlement figure.

Joe_Bloggs

@Thrugelmir
How will the original parties know about the size of the negative equity until the property is sold ? How can the property be marketed at all ?

In what context do you place the phrase, " 50% of the negative equity isn't uncommon as a settlement figure" ?

J_B. (Clearly clueless. )

Calvera

We're having it valued by the housing association for sale, but my two difficulties are paying until it's sold and also the negative equity issue.

If I do manage to find the 50% I don't want to still owe half of the other 50% if you see what I mean!!

Thrugelmir

Joe_Bloggs wrote: »

@Thrugelmir
How will the original parties know about the size of the negative equity until the property is sold ? How can the property be marketed at all ?

As I said speak to the lender. As the property cannot be sold without the lenders consent. As there will be insufficient equity to repay the mortgage.

As for the negative equity itself. Prepare for the worst case scenario.

Joe_Bloggs

I take it 50-50 was a fair dibs division of negative equity rather than a settlement on a bad debt at 50%. My fault entirely for not understanding the situation.
J_B.

Calvera

Yes, exactly - just don't want to manage to find my half then still be chased for the other half!

Calvera

Also am I OK to live there paying half and my ex paying half? Is there anything legally to say I have to pay the entire mortgage each month given that she has been (with help!)

zzzLazyDaisy

Paying 50% (of either the negative equity or the mortgage payments) isn't going to keep you out of financial trouble.

Assuming that you are both on the mortgage, then you are both jointly and severally liable for the whole amount (this goes for the monthly repayments and the negative equity).

What this means in plain English is that you don't just owe 'your half', you owe all of it. As does your Ex. The lender can decide who to go after and will inevitably chase the person who is most likely to be able to pay and/or is easiest to find. If the mortgage isn't paid in full, the house will be repossessed and sold. You will still be liable for the outstanding negative equity and your ability to get credit will be trashed for years to come.

holly_hobby

In fact mortgagors (borrowers) may be pursued for 12 yrs for any os debt.

Holly