Mortgage - Relationship Breakdown - Can I Escape?!

rhowes2000

Hi All,

I'm hoping one of you very knowledgeable people out there will be able to help please.

I split from my ex partner 5 years ago, we have a joint mortgage on a property which is still in place. It's in negative equity and my ex partner lived there and paid the mortgage in full.

My ex has now moved out with a partner, he has got a small mortgage with a large deposit on a house. The previous house (still in joint names with me) is now being rented out to someone they know.

Hopefully that makes sense! So, what I'm looking for is to get my name off that mortgage as I would like to buy somewhere on my own early next year. I don't want any pay off or any money from the rental income, simply my name off that mortgage.

My thought is to ask the mortgage provider if they would switch the mortgage to a buy to let mortgage in my ex's name only. My ex's income wasn't enough to support the mortgage fully in the eyes of the lender even though she had been paying it fully for 4 years (as it was at the time). So, with her changed situation due to the rental income would the lender see this as positive and be more likely to change the mortgage to BTL and remove me?

The complications are, we have a daughter together and I don't want to jeapordise her home or lifestyle in any way. Secondly, there is a secured loan against the house for around £22k, which means negative equity overall.

Any help would be much appreciated.

Thank you for reading.

Thrugelmir

You firstly need to address the matter of the negative equity.

Is the net rental income income being used to repay the debt?

rhowes2000

The short answer is no, we make the minimum loan payment each month which is £136 (split 50/50). I don't know what the rental income is but I'm confident it would only just cover the mortgage payment. Thank you Thrugelmir

Annisele

I'm confused...

Are you saying you're paying half of the mortgage payment each month, but your ex is keeping the whole of the rental payment? That doesn't sound fair.

Do you have consent to let from the mortgage lender? If not, be careful about asking for a switch to BTL in your ex's name only.

rhowes2000

Hi Annisele, no I don't contribute to the mortgage, I just pay my 50% of the loan payment each month. Consent to let isn't in place as far as I know, I'm aware this can be dodgy ground and therefore don't want to take any risks that could rock the boat so to speak.

wannahouse

rhowes2000 wrote: »

Hi All,

Secondly, there is a secured loan against the house for around £22k, which means negative equity overall.

i think what he is saying is he contributes 50% of the LOAN that is also secured against the house...
he stated she pays the entire mortgage cost.

Annisele

For a BTL, usually the lender will want the rent to cover around 125% of the mortgage payment, and for the debt to be no more than 75%/80% of the property value. It doesn't sound as though your property satisfies either of those, so unfortunately I think a BTL mortgage is unlikely.

If you approach the lender and ask to switch to BTL, that (in my view) makes it more likely the lender will find out you're already letting the place. Worse case the lender would then demand immediate repayment of the loan - which from the sounds of it would put you in some difficulty.

What is your long term plan for the property? At the moment you're in business with your ex, which doesn't sound like it's sustainable. Are you certain you understand all your rights and obligations as a landlord?

rhowes2000

Hi Annisele,

I have heard the 125% rental coverage is typical and therefore a blocker in this instance.

The long term plan is to rent it out as far as I'm aware. From my perspective I just don't want to have my name attached to this house. I appreciate it is now an even messier situation, I guess my aspirations to own a property will have to go on hold for a very long time. Thanks for your help all.

Thrugelmir

rhowes2000 wrote: »

The long term plan is to rent it out as far as I'm aware. From my perspective I just don't want to have my name attached to this house.

You need to speak to your ex and come to an agreement. Currently your ex has the benefit of any "profit" from letting. While you still carry liability for the debt.

The obvious solution is that you share the gains and losses from letting the property 50/50. Using the profit along with some capital from both of you to reduce the debt owed (monthly overpayment on the mortgage). Relying on capital appreciation alone may not be sufficient. As over time the property will require expenditure in the form of refurbishment.