Mortgage Company won't allow transfer of title.

westcountry

Hello
I'm hoping for some advise please x
I jointly own a property with an ex (moved out and not contributed to mortgage since 2010)

After he moved out he ran up a debt on a credit card and never attempted to pay it back. The credit card company put a 'charge' against his name on the property.

As there is little equity in the property, My ex has agreed to transfer the house into my sole name.
He won't deal with the debt and I want a clean break.
My solicitor advised me to contact to solicitors acting for the Credit Card Company and make an offer to settle the debt myself. (unfair, I know!!)

Thankfully, a bright spark from this forum suggested I contact my mortgage company to see if they'd take my ex's name off the mortgage before I start paying his debt off.

I'm so glad he made the suggestion, as my mortgage company have done a calcualtion said that despite managing all bills and mortgage payment alone since 2010 they'd not be prepared to offer me the mortgage alone.

The light on the horizon is that my brother (who is reasonably well off and lives abroad - if that makes a difference??) would be prepared to act as guarantor or possibly gift me a lump sum to get me to a point where the mortgage company will accept the change of parties and remove my ex's name from the deeds.


My questions are
a, what tax implications would there be if I were to receive a 'gift' from my brother or is it better for him to act as guarantor?

b, if my ex stays on the mortgage but a solicitor writes a letter saying something along the lines of "that if/when the property is sold that he would have no claim on an future equity" would it be legal & stand up in court?

Sorry to have to ask these questions but hopefully someone might have some answers or experiences of their own to share thus saving me time & more money on legal fees.:)

Thrugelmir

westcountry wrote: »

b, if my ex stays on the mortgage but a solicitor writes a letter saying something along the lines of "that if/when the property is sold that he would have no claim on an future equity" would it be legal & stand up in court?

Your solicitor can write a letter. Unfortunately your ex has to agree to the terms and in effect sign the document. If he were to receive legal advice I feel that he would be advised not to sign.

Goldiegirl

Re your brother acting as guarantor.

If they do agree to it, they would look at it as a fairly temporary solution, in the medium term they would expect you to be able to afford the mortgage by yourself.

In order to strengthen your case, be prepared to demonstrate that within 3 - 5 years you could afford the mortgage by yourself - e.g. Pending pay increases, promotions, training so you can get a better paid job, that sort of thing

Yorkie1

Even if the financial side of it was OK, have you checked whether you'd be allowed to transfer the property into your own name before the charge relating to your ex's debt is paid off?

ValHaller

westcountry wrote: »

After he moved out he ran up a debt on a credit card and never attempted to pay it back. The credit card company put a 'charge' against his name on the property.

Did you sign to accept this charge being placed? If you did not, the most thta should have been placed is a Restriction. This is the relevant thread https://forums.moneysavingexpert.com/discussion/1839539

kingstreet

ValHaller wrote: »

Did you sign to accept this charge being placed? If you did not, the most thta should have been placed is a Restriction. This is the relevant thread https://forums.moneysavingexpert.com/discussion/1839539

I agree. Sole debt on jointly owned property is a restriction, not a charge.

Annisele

westcountry wrote: »

My questions are
a, what tax implications would there be if I were to receive a 'gift' from my brother or is it better for him to act as guarantor?

If you and your brother both lived in the UK, and if he gave you a genuine gift (i.e. with no expectation of repayment), then the only tax implications might be inheritance tax - and that would only apply if he died within seven years of making the gift.

Since he lives abroad, then the tax implications depend on where he is. We don't have gift taxes in the UK, but lots of places do.

b, if my ex stays on the mortgage but a solicitor writes a letter saying something along the lines of "that if/when the property is sold that he would have no claim on an future equity" would it be legal & stand up in court?

As others have said, a solicitor writing a letter has no effect at all - you'd need your ex to agree to that (or to get a court order).

antrobus

westcountry wrote: »

....My questions are
a, what tax implications would there be if I were to receive a 'gift' from my brother or is it better for him to act as guarantor?

A 'gift' from your brother carries no tax implications, as far as I can see. Unless your brother dies in the near future and his estate is liable for IHT.

westcountry wrote: »

... b, if my ex stays on the mortgage but a solicitor writes a letter saying something along the lines of "that if/when the property is sold that he would have no claim on an future equity" would it be legal & stand up in court?

Such things are quite common in divorces, and they do stand up in court.

ValHaller wrote: »

Did you sign to accept this charge being placed? If you did not, the most thta should have been placed is a Restriction. This is the relevant thread https://forums.moneysavingexpert.com/discussion/1839539

I believe that to be correct. As a general rule, if the property is in joint names, and the debt is in one name only, then any 'charge' placed by the debtor against the property isn't really a charge.

antrobus

Annisele wrote: »

...As others have said, a solicitor writing a letter has no effect at all - you'd need your ex to agree to that (or to get a court order).

Well simply writing a letter wouldn't do. You'd need an actual formal trust deed (or something similar)

Thrugelmir

ValHaller wrote: »

Did you sign to accept this charge being placed? If you did not, the most thta should have been placed is a Restriction. This is the relevant thread https://forums.moneysavingexpert.com/discussion/1839539

A charge can change the legal status of ownership.

The debt would be repaid from the ex's share of the equity in the property. (If there is any in this case).

westcountry

Goldiegirl wrote: »

Re your brother acting as guarantor.

If they do agree to it, they would look at it as a fairly temporary solution, in the medium term they would expect you to be able to afford the mortgage by yourself.

In order to strengthen your case, be prepared to demonstrate that within 3 - 5 years you could afford the mortgage by yourself - e.g. Pending pay increases, promotions, training so you can get a better paid job, that sort of thing

Hi Goldiegirl
Thanks for your advice.
I can prove that I have paid the mortgage without assistance for the past 3 yrs and have been within the same position with my current employer for over 3 yrs. As it is a very small company 9 people in total, it'd be difficult to prove a large increase in future pay.

I love my full time job & it's actually reasonably well paid for this area (25k) The flexibilty to work my own hours suits me as a parent too, so I'd be very worried about moving on to something unknown.
Catch 22!

Thanks again.