Amicable divorce, house in negative equity, want to transfer mortgage into a single n

SmurfAtko

Hi all,

This is my first time posting, and would be grateful of any advice on a tricky situation that seems to have no easy way out ... but any guidance very welcome!

• Separated from my husband four years ago
• Still yet to get divorced - amicable split, no arguments (up to now) over assets
• I left the house, ex-husband remained and has been paying mortgage
• I need to get name off the mortgage as my own, second mortgage is soon up for renewal and I don't want to be penalised with high interest as I was when initially took it on (because of debt against my name from marital house)
• Ex has terrible credit rating, but now with a new partner and they want to try and take it on
• We want to transfer mortage from me to her, but have been told that's not possible, and that they need a brand new mortgage (which they will struggle to get)

We owe £127k on the house - worth around £120k. So not great ...

Absolute last resort is to sell the house - don't want ex to lose the house, and don't have the money to meet the shortfall / fees

Do we have any options or is that wishful thinking??

Thanks in advance - appreciate any views

Thrugelmir

SmurfAtko wrote: »

Do we have any options or is that wishful thinking??

Either put yourself first or your ex. There's no easy solution from the circumstances you outlined. I would imagine your ex is perfectly happy with the arrangement as it stands.

kingstreet

SmurfAtko wrote: »

We owe £127k on the house - worth around £120k

Your mortgage options are going to be nil, I'm afraid.

You'll need the lender's permission to sell the property for less than what's outstanding on the mortgage and make an agreement to repay any shortfall.

enabledebra

Now I’m sure this is a truly flawed idea fuelled by general ignorance but: What would be the option for converting ownership to tenants in common rather than joint tenants and the OP getting a buy to let mortgage for her share and renting back to the ex in a shared ownership arrangement (assuming the ex can get a mortgage to cover his share)

As I understand it buy to let mortgage debt wouldn’t be taken into account as a debt when looking at a mortgage on the OP’s own home? (I’m raising it as I’m in a similar position in a different scenario and have been thinking about whether this could be my solution but have decided I might be barking up the wrong tree entirely.)

Annisele

enabledebra wrote: »

What would be the option for converting ownership to tenants in common rather than joint tenants and the OP getting a buy to let mortgage for her share and renting back to the ex in a shared ownership arrangement (assuming the ex can get a mortgage to cover his share)

Sorry - wouldn't work. You can only get a mortgage on a whole house, not on half of one.

Regardless of whether OP and her ex own as joint tenants or tenants in common, a mortgage lender is going to want one mortgage loan with both of them named on it.

The problem with the "one mortgage each for half the house" plan comes when one of them stops paying. Their lender would want to repossess - but it's not fair to chuck out the person who has been paying and meeting all their obligations. So, lenders want to make sure that all owners promise to pay the whole of the mortgage.

Hope that makes sense!

Thrugelmir

enabledebra wrote: »

Now I’m sure this is a truly flawed idea fuelled by general ignorance but: What would be the option for converting ownership to tenants in common rather than joint tenants and the OP getting a buy to let mortgage for her share and renting back to the ex in a shared ownership arrangement (assuming the ex can get a mortgage to cover his share)

As I understand it buy to let mortgage debt wouldn’t be taken into account as a debt when looking at a mortgage on the OP’s own home? (I’m raising it as I’m in a similar position in a different scenario and have been thinking about whether this could be my solution but have decided I might be barking up the wrong tree entirely.)

Unfortunately you are.

enabledebra

Annisele wrote: »

Sorry - wouldn't work. You can only get a mortgage on a whole house, not on half of one.

Ahhh- so there's the catch in my brilliant plan- Thank you

holly_hobby

You can't have 2 separate resi mortgages on one house (ie split in reflection of any TIC arrangement), as all mge lenders demand 1st charge (re possessionary rights etc).

2 separate lenders - well obv you can't have two 1st charges .. hence the problem on the proposition.

Joint mortgages - all those named on the deeds have to be party, and are jointly and severally (singularly) liable for the entire debt - regardless of what any legal division of equity is (ie as denoted within any TIC arrangement).

Hope this helps

Holly