Existing mortgage being transfered into a new mortgage

LouisaF

Apologies but I really don't understand mortgages and would like some advice:

My partner has a joint mortgage with his ex in which he put down £17.5k deposit and she put down nothing. She wants her name removed from the mortgage and has provided a written letter of consent. The plan is now to add me to the mortgage which we have been informed needs to be a separate mortgage and we have separate reference numbers for these. My partner told them that in addition to adding me to the mortgage - I would also be putting in £17.5 to match and lower the repayments. I had cause to phone the bank today and it would appear that the lender want £17.5k paid on the EXISTING mortgage before they will transfer the titles and approve the mortgage. I think possibly they may have got their wires crossed and instead of noting that I wished to pay this sum of money on our NEW mortgage, they are saying we have to pay it on the existing mortgage. The lady on the phone didn't seem to be able to clarify any of this. The problem with me paying this money on my partners EXISTING mortgage will not reflect that I have contributed to the new mortgage - should our relationship break down. One option I thought of was to involve a Solicitor to draw up a contract reflecting this - however even upon writing this I feel that the bank have got it wrong. The lady on the end of the telephone stated that my partner needed to reduce the amount borrowed before they would remortgage both of us (due to the increased risks these days), but it seems strange that the amount they are talking about is the amount that I wish to contribute. What should I do and how do I protect and have my contribution protected?

Thrugelmir

The issue may well be the value of the property. As more than likely its fallen since the property was purchased. Despite your partner injecting £17.5k initially there may not be enough equity in the property now to cover this.

In general terms to cover your interest in the property. You will need a Deed of Trust drawn up by a solicitor.

LouisaF

In general terms to cover your interest in the property. You will need a Deed of Trust drawn up by a solicitor.[/QUOTE]

Oh thank you. Do you know how that works? - should things break down between us in the future is my £17.5K protected and returned to me? Any idea on Solictor fees for this?

DVardysShadow

The mechanics of closing the old mortgage and opening a new one require that the new mortgage is used to pay off the old mortgage. But as the new mortgage is less than the old one, you have to pay in your £17500 to pay off the old mortgage.

This is the point which the lender's lady on the phone was trying to get across. However,it seems to me that she was not taking on your concerns about having your interests looked after.

As I see it, in terms of buying and selling a house, this goes on all the time and is not a problem. So I think you need to get a solicitor to look after the lender's requirements and to protect your interests in the property.

getmore4less

if you are buing into the house you need to establidh the current value and any equity your partner may have after the curent mortgage is redeamed.

Then you can then work out who owns what and what you need to do to protect your interest.

To do it properly with equity you can't protect your cash value, you buy a % of the property and get that back when you need to exit.

Start with what you think the place is worth and what the mortgage lender thinks the placee is worth. (not what it was bought for or your partner thinks it's worth

Could it be the lender has the correct understanding but your partner has got your wires crossed.