Advice re: break-up and mortgage.

vyle

My ex has finally moved out after we split up in July (we've remained friends throughout) but that does mean that while I always paid for the mortgage, we split other bills so kept the mortgage in both our names, and the title deeds are both in our names.

I have spoken to him and he is happy to come off the deeds and is awaiting the transfer deed from the solicitor, but they won't issue one until I've changed the mortgage.

This is where it gets a bit complicated. I have come into enough money to pay off the rest of the mortgage in a lump sum, but I don't want to do it while it's in both of our names, because I don't want to run the risk of him potentially getting half of that should he decide to contest the transfer deed. however, I do not earn enough to remortgage in just my name, on my earnings alone, and if I DID remortgage, I wouldn't be able to clear the debt without paying extra interest and mortgage arrangement fees and whatnot...

I really don't know what to do, because I could pay the mortgage off tomorrow in theory, but if I do it before it's in my sole name, could I end up losing everything?

Annisele

Are you married?

zzzLazyDaisy

This ^^^^ . If you are married then this money may be deemed a matrimonial asset and he could make a claim on it in the divorce proceedings.

If you are not married, then this is not a problem as you can pay off the mortgage and have the land re-registered in your name at the same time. See the solicitor who is going to deal with the transfer and get a quote for dealing with the two things at the same time.

Otherwise, you will probably find that your lender will insist on you taking over the mortgage. This usually means you applying for a new mortgage in your name which may incur administration costs and will definitely incur solicitors fees and land registry fees. There is not much point in doing that if you are then going to pay it off afterwards.

EDIT - yes, if you pay the mortgage off while the house is in joint names, he would still be entitled to half the equity regardless of where the money came from. Is he likely to be difficult if he knows that you have this money?

shaniannie

As long as there are no complications with the lump sum of money, shouldn't it just be a case of getting a solicitor to do a transfer of equity, and instead of taking out a mortgage to complete the process, you pay cash for it?

vyle

zzzLazyDaisy wrote: »

This ^^^^ . If you are married then this money may be deemed a matrimonial asset and he could make a claim on it in the divorce proceedings.

If you are not married, then this is not a problem as you can pay off the mortgage and have the land re-registered in your name at the same time. See the solicitor who is going to deal with the transfer and get a quote for dealing with the two things at the same time.

Otherwise, you will probably find that your lender will insist on you taking over the mortgage. This usually means you applying for a new mortgage in your name which may incur administration costs and will definitely incur solicitors fees and land registry fees. There is not much point in doing that if you are then going to pay it off afterwards.

EDIT - yes, if you pay the mortgage off while the house is in joint names, he would still be entitled to half the equity regardless of where the money came from. Is he likely to be difficult if he knows that you have this money?

We are married, yes (we were going to go for the 2 year separation no-fault divorce). I think the majority of the flat is safely, legally mine because it was paid for with inheritance before we got married. The final chunk is a gift from my parents, and I think we are tennants in common with it weighted as 100% ownership on my side if any of that helps.

I didn't know that I could do a re-register after paying off the mortgage, but yes, I think he will get awkward if he learns that the debt is cleared, because he may suddenly see it as free money that he's entitled to, even though I've been the one paying for it for the duration (as can be proven by us never having joint bank accounts).

Thrugelmir

vyle wrote: »

We are married, yes (we were going to go for the 2 year separation no-fault divorce). I think the majority of the flat is safely, legally mine because it was paid for with inheritance before we got married. The final chunk is a gift from my parents, and I think we are tennants in common with it weighted as 100% ownership on my side if any of that helps.

I didn't know that I could do a re-register after paying off the mortgage, but yes, I think he will get awkward if he learns that the debt is cleared, because he may suddenly see it as free money that he's entitled to, even though I've been the one paying for it for the duration (as can be proven by us never having joint bank accounts).

Book an appointment with a solicitor as you need to formalise the splitting of your affairs by obtaining a financial consent order. This will deal with any issues relating to the property and attached mortgage.

What you think might the case, won't be if there isn't documentary proof in place. So don't assume anything to be case. Ensure every aspect is dealt with formally.

zzzLazyDaisy

vyle wrote: »

We are married, yes (we were going to go for the 2 year separation no-fault divorce). I think the majority of the flat is safely, legally mine because it was paid for with inheritance before we got married. The final chunk is a gift from my parents, and I think we are tennants in common with it weighted as 100% ownership on my side if any of that helps.

No it doesn't help - 'thinking' something is the case does not make it legal. It is impossible to own a house as tenants in common with one tenant in common having 100% ownership. That would mean the house would be registered in that person's sole name. Tenants in common means the house is jointly owned, which means your husband definitely has a share in the property.

I didn't know that I could do a re-register after paying off the mortgage, but yes, I think he will get awkward if he learns that the debt is cleared, because he may suddenly see it as free money that he's entitled to, even though I've been the one paying for it for the duration (as can be proven by us never having joint bank accounts).

Who has paid what for the duration of the mortgage is irrelevant, it is who owns what share of the house under the tenants in common split that matters. This dictates how the equity in the house is divided.

You should also be aware that when you do eventually come to divorce, all the joint assets fall into the pot in any case. The fact that the house has been transferred to your name does not automatically take this out of the equation.

If you are not planning to divorce yet, I strongly suggest that you see a solicitor and have a Separation Agreement drawn up making it clear that the parties have mutually agreed to transfer the property into your sole name, and that it is the parties intention that in any subsequent divorce the OH does not have any claim against the house. The agreement will also state that he has had the opportunity to take legal advice and the solicitor will (should) tell advise him to take the Separation Agreement to a solicitor of his own choosing and obtain independent legal advice. This will cost him and many people don't bother, but it will protect you later when you divorce.

For the moment, I would ask your parents to keep the money. However tempting it may be, sinking more money into the house before ownership has been dealt with could be a very costly mistake.

You need to seek legal advice.

vyle

Thanks for your replies.

I have been in contact with a solicitor and things are now proceeding. My ex, for his part, is perfectly happy to sever ties, and says he is not planning on making anything complex or messy, so that's all good.