Getting the ex off the mortgage

purplebiro

Hello,

Apologies if this is the wrong place - please tell me where to repost if needed.

I bought my house with my then-boyfriend 5 years ago, with an informal arrangement between us that he owned 25% I owned 75%. In effect this means that he paid 25% of the 5% deposit (those were the days, eh?), paid (and still pays) 25% of the mortgage and 25% of the cost of any maintenance/redecoration and receives 25% of any rental income (on the spare room). We had no contract to this effect and the mortgage and deeds are in both our names.

We split 3 years ago, not exactly amicably but we have managed to be civil about everything regarding the house and the arrangement between us has stayed in place.

I am now in a financial position where I can afford to pay the full mortgage amount myself each month but I do not have any capital to buy him out at this time, nor does the house have any capital (low deposit + 2006 house prices mean I think the house is only *just* out of negative equity). At the end of last year I explained this to him and he said he would be willing to meet with a solicitor/IFA with me to discuss options for exiting the house but I'd like to meet with someone in advance to make sure I am clear on the options and don't get railroaded into anything I can't afford or confused about the options. But who should I approach? A solicitor or an IFA? And who should we see jointly after I've had the initial meeting?

My basic idea would be this: I would take over paying the mortgage and maintenance costs and get all the rental income from the spare room and he would be taken off the deeds and mortgage. At that time we would have the house independently valued and a value on his investment to date would be calculated and we would have a contract between us that this amount (plus interest? at what rate?) would be paid to him when the house is sold (or before if my financial situation changes and I happen to have the amount available to give him). Does that sound like a reasonable plan? I am aware that it may end up being a small amount for him and this may affect his decision to go for it or not but at this stage I'm more interested in whether this is something that's do-able.

The other issue with the plan above is how it would affect the current mortgage - we're on a SVR with our original lender at a very good rate given the high LVR. If I wanted to change the name on the mortgage would our lender force me to take a higher rate? Also worth mentioning that I don't have a brilliant credit history - a few quite late payments (although never on the mortgage) on credit cards from around 5-6 years ago. My ex has a very high salary and a perfect credit rating so I don't know whether him coming off would affect the risk to such an extent that the mortgage company would no longer accept me. Understand that's a bit of a hypothetical one but any ideas or experiences would be helpful.

Thanks for reading this long 'ol post and apologies again if it's not in the right place.

Trentenders

A couple of immediate questions, before anyone will be able to give a reasoned answer about your chance of getting the mortgage in your own name:

What is the outstanding mortgage?
What is the house worth?
What are your earnings?

Not that it particularly helps with your situation now, but a couple of things to maybe also think about:

Could you survive without the rental income, if you struggled to find a tennant?
Do yo uthink that you could you survive if rates increased by a couple/few percentage points in the next few years?

Thrugelmir

Getting late. So a couple of immediate comments.

100% mortgages are no longer available. So removing your ex from the mortgage is not an option.

As there's no equity in the property. Unsure why you ex should receive anything.

purplebiro

Outstanding mortgage? £111,000
What is the house worth? £125,000 (tops, prob nearer £120)
What are your earnings? £30,800 (new boyfriend also lives with me and earns £20k but is not in a position to take on a mortgage - currently considering going freelance - plus I've learnt my lesson on relying on men (JOKE!!))

Yes, I could survive without the rental income, yes I could survive if interest rates went up a few % points. If I lost the rental income and the interest went up I would struggle (but could possibly lean on family as a worse case scenario - especially as mum is keen to get the ex out of the picture, "never liked him" apparently, wish she'd said that 7 years ago )

purplebiro

Thrugelmir wrote: »

So removing your ex from the mortgage is not an option.

Sorry, you'll have to forgive my stupidness - do you mean that to remove him from the mortgage would effectively be re-mortgaging the property? I can't just take his name off and stick with my current deal?

purplebiro

Giving this a little bump.

FCRangers

I met my girlfriend 3 years ago, she had a 105% mortgage at the time with NRAM, I agreed to go onto the mortgage in replace of her ex, so we didn't remortgage but we had to submit a new application so it can be done. I guess each mortgage company are different but I'd ring them.

ACG

Ask the mortgage lender if they will allow the removal of your ex.
This means you dont need to remortgage, you can stay on the same rate and everyone is happy.

All you have to worry about then is the paying your ex off. That would be the trickier bit.

rjh35

I am in a similar situation myself. My mortgage with my ex is with HSBC. We took out a 100% mortgage in 2006 with 3 years interst only!!!!
We split up 18 months ago, and they basically have looked at it as a remortgage in my own name, with a little bit of compromise in the LTV (They said it could maybe go through at 93-94%). However, due to my credit card debts, its not happening now. They did look at affordability of everything based on my own salary.
When i first split up with her, I though it would be a simple case of removing her name with her agreement. Alas, that was most certainly not the case!!

CLAPTON

well if the house is worth 120k
and your mortgage is 111k
that leaves 9k equity
assume about £1k of costs in removing him from the mortgage that leave about 8k of equity so his share at 25% is 2,500 .... can you not find this some how to ensure a clean break?

DVardysShadow

purplebiro wrote: »

My basic idea would be this: I would take over paying the mortgage and maintenance costs and get all the rental income from the spare room and he would be taken off the deeds and mortgage. At that time we would have the house independently valued and a value on his investment to date would be calculated and we would have a contract between us that this amount (plus interest? at what rate?) would be paid to him when the house is sold (or before if my financial situation changes and I happen to have the amount available to give him). Does that sound like a reasonable plan?

No it is not a reasonable plan. For either of you. Unless you both understand the issue and accept the consequences.

You should only crystallize his share of ownership into cash at the point you pay him off. If house prices rise by the time you pay him off, he will have been deprived of that rise from the time you crystallized his share as a cash value. If they fall by the time you pay him off, you will be over paying him for his share.