Applying for Divorce and Negative Equity

FuzzyLilMonkey

I have separated from my partner for 2 years... no children. However the house is in negative equity by £30,000. I currently remain in the house yet my ex-wife wants her name removed from the mortgage (158k) and it transferred into my sole name (which I am open to and can afford).

However the mortgage company (C&G) will only allow the transfer if we clear the neg equity and I raise a deposit of 10%.

What are our options... is this the only way? Thanks

holly_hobby

Clear the negative equity, sell and come to an arrangement with the lender for the repayment of any shortfall (pursuable for up to 12 yrs), OR if she agrees, stay put until the market has recovered (crystal ball anyone ?), or you have the capital to offset the negative amount.

Hope this helps

Holly

Simon_gloster

As H describes, the loan to value needs reducing. If you cannot reduce the debt then she stays on. No lender will agreeba joint to sole deal with such huge deficits.

The only way forward I can see is reduce the debt by 5-10% and add a borrower. This would be considered by underwriters especially if both new borrowers are professional.

Having 2 people to chase in repossession is their primary interest.

DVardysShadow

Crossposted https://forums.moneysavingexpert.com/discussion/4064741

Please don't crosspost or if you really must and it is usually quite unnecessary, at least say that you have crossposted

Beckyy

Joint mortgage, joint debt...joint negeative equity. What has your wife proposed about it? Or has she just said she wants her name off the mortgage?

I would refuse. Buying a house together is a big commitment and not something you can walk away from whenever it suits her.

FuzzyLilMonkey

Beckyy wrote: »

Joint mortgage, joint debt...joint negeative equity. What has your wife proposed about it? Or has she just said she wants her name off the mortgage?

I would refuse. Buying a house together is a big commitment and not something you can walk away from whenever it suits her.

If honest that's exactly her stance. But things are amicable thus far. I guess that although it was her choice to leave I'm trying to do whats right by me and the mortgage. I just wish banks would realise that I have been paying everything even before the split, and want to achieve what's best for everyone. :-s I guess all I can ask for is help and really appreciate everyones comments

holly_hobby

Hey fuzzy,

I can completely understand your views ... unfortunately the bottom line with any lender will be the repayment of the finance (and in the case of neg equity, and a potential shortpayment on mortgage redemption, how many debtors they can pursue for it - the more they have the more likely they are to get something back, is their MO !).

If collectively you are unable to reduce the mge borrowings to within a positive LTV, then Mrs Fuzzy, will have to sit put I'm afraid .... at least until you can address the LTV or the market improves and you can sell (with a nil or a reduced shortfall that you can manage from personal capital).

I know its a difficult situation, and ideally you would just like to cut the ties, but the current issues are what they are - which I'm sure she will/must appreciate.

Hope this helps a little

Holly x