mortgage & unsecured loan HELP !

rich2707

thank you for reading..
in june 2006 me and my partner took out a mortgage with northern rock for £90,000 and a unsecured loan for £24,000. the house we bought was approximately £95,000. by july we had separated and she went to live in Australia. as she is now back over here i am trying to take her off the mortgage by doing a change of parties form. the house today got valued at £85,000. i want to keep living here but nram told me today that as part of the change of parties they will want the unsecured loan settling £23,773 which i cant afford, any ideas or advice on a way round this as i really want her off my mortgage. any replies are gratefully recieved!

Gary123456790

Hi,

Unless you can pass the affordability on your own, you cant get her taken off. You can check with other lenders, but likelihood is you'll have a very high LTV.

Gary.

Thrugelmir

Keep paying the mortgage and loan back. Until such time as you have positive equity. There's no possibility of remortgaging.

silvercar

This is a joint responsibility. Is she desperate or you?

If its not possible its not possible and you will just need to wait.

As an aside, if the property is worth less than the mortgage and you are taking on the larger debt, she should be paying you to do so. eg property owned 50/50 worth 85k, total debts £113k, difference is 28k. So if she wants you to take on all the loan and all the mortgage she should be paying you £14k to accept the full liability for all the £113k of debt.

rich2707

thanks for all your replies; its me who wants her off basically. affordability should be fine as my current partner will be named on the mortgage. if for example i sold for £85000 how would the £30,000 shortfall be asked for? would it be a monthly payment for me and my ex and wouldnt that mean id have to take her to court to get the amount split 50 50

also would it be worth me trying a mortgage with a new lender to cover the £113,000 so there is no unsecured loan?

basically i want to live here still but not have her name on the mortgage, and am happy to take on the full amount solely, its the un secured bit which will stop it from happening

BoGoF

Sorry, but nobody is going to give you a mortgage for £113,000 on a property worth £85,000.

rich2707

i get your point but when applying for one i thought they told you how much you can get? me and my partner double what i got when i got my £113,000 plus another house too so thought it could be an option.. if not what happens to my unsecured amount and how would that be paid back?

silvercar

The lender may tell you how much you can borrow based on your income, but how much they are actually prepared to give you depends also on the property value. If a particular mortgage offered is restricted to 90% LTV then they won't give you more than 90% of the property value.

if for example i sold for £85000 how would the £30,000 shortfall be asked for? would it be a monthly payment for me and my ex and wouldnt that mean id have to take her to court to get the amount split 50 50

If you sold you would have to agree with the lender how you would repay the shortfall. Unless they were prepared to agree to an unsecured loan you have to clear the whole mortgage on sale, usually by borrowing money elsewhere to make up the shortfall.

No such thing as 50 50, you are both liable for the whole amount. The lender doesn't mind who pays.
You could only take her to court for her half if you had a binding agreement that she would pay half.

rich2707

No such thing as 50 50, you are both liable for the whole amount. The lender doesn't mind who pays.


thats what i meant though, surely she would be liable for £15,000 and me the same? i couldnt afford a £30,000 debt on my own and shouldnt have to as she is liable for half that so if that got broke down into monthly payments how could i ensure her half is paid as if she doesn't pay or cant afford to then thats unfair on me as i can afford my half but my credit rating would be affected

Brock_and_Roll

Rich,

You misunderstand what "joint and several liability" actually means. There is no such thing as "your half" of "her half".

Basically, if she disappeared off the face of the earth, you would be liable for the whole lot, and vice versa. This is precisely why banks are loath to remove a party from a joint mortgage because regardless of the current financial position of the borrowers, they have two people to go after, now or in the future.