affordability

mfactor

My partner and I split over a year ago and because we had a young child she remained in the family home, but she is finding it difficult to manage a large 3 bed semi .

We get on well but she wants to move out to a smaller place (rented) , she also wants out of the mortgage, the house is worth £136,000 but we owe £143,000 on it so selling is not an option.

I have tried to talk her out of it, as the way I look at it is that the house will be worth more one day and why pay someone elses mortgage for them by renting and neither of us will be in a position to buy a house that large/expensive in the forseeable future.

However she is adamant she wants out, so we contacted Northan rock who are sending me a form which will put the mortgage in my name.

Heres the question, they will do an affordability check on me and I know that we only just made it with both our incomes, so I will probably fail .

Or do they use a different criteria in this situation

lincroft1710

That's a great move on her part as you get lumbered with a house in negative equity and a mortgage you'll struggle to pay.

princeofpounds

Then you will probably fail.

You are both stuck, unless you sell up and northern rock agrees to convert your negative equity into an unsecured loan (which is not a foregone conclusion).

Her desire to sell up is not illogical.

- she may not want to be associated with you in a financial product any more, for emotional or practical reasons
- she might wish to downsize because she is struggling financially. an extra room is no good if you can't heat the house properly due to the cost.
- she might not want the risk of the highly-leveraged exposure to property prices. They do tend to go up over time due to inflation, but in real terms they are still expensive. The time inflation takes to erode any house price fall could be a decade long.
- she might not want the risk of exposure to interest rates. Payments could easily double if they go up to more normal levels, a one-way ticket to bankruptcy for her.
- she might want to move, or at least have the flexibility to move.
- finally, remember that a 100% mortgage is just renting the money rather than renting the property. You don't own anything except the ability to work on the house and a big bet on property prices.

Basically, it is easy for you to say you want to keep the house, but she does not have to share that opinion for all those reasons and more.

And you cannot 'trap' her in the house against her will, if she is determined enough to get an order for sale from a court.

The only people who can 'trap' her and you are Northern Rock and they might well be inclined to do that.

BitterAndTwisted

So, you're about to take on sole responsibility for a large house in negative equity and still have the financial responsibility for putting a roof over your child's head as well? Double whammy unless you have some cunning plan to live in the property with two lodgers and charge them both a mint.

Your ex isn't as daft as she looks but perhaps NR will save you from yourself and deny you the mortgage in your sole name.