Separating - Can I leave mortgage in joint names?

myfairlady

Hi all,

My Husband and I are separating and he will no longer be paying the mortgage (he will be renting and I will remain in the house). I called the mortgage company who said that to take him off the mortgage I will lose my current interest only deal.

Can someone please give me a head's up here. We are putting a separation agreement together.

is it possible to have his name removed from the house and yet still remain on the mortgage so that I can currently stay on the same deal?

Thanks in advance to anyone who can offer advice.

x

BigAunty

Do you have an investment vehicle to pay down the capital element of your interest only mortgage?

benjus

I don't think it will be possible to change the property ownership without changing the mortgage. Why do you want to change it, anyway? Did you buy it before you were married?

I still have a mortgage in joint names with my ex-wife, as we were renting out the house when we divorced and it was providing a useful extra income. We're selling it now, but I didn't want to change the mortgage deal as it is a very cheap tracker.

myfairlady

Thanks for the speedy responses!

No, we do not have an investment vehicle to pay the capital on the mortgage (stupid I know)....we took out interest only in the hope that once we could afford it we would switch to repayment. Now we're separating that clearly isn't going to happen and I can't afford repayment on my own.

The reason we thought that he needed to come off the deeds of the house is because he will no longer be paying the mortgage. Do you think that we could put in the separation agreement that he will take 50% equity of the house value upon its sale (Whenever that might be) and yet not be liable for the mortgage payments...even though his name is on the mortgage?

Confused!

kingstreet

Get legal advice on the separation.

He won't be removed from the ownership without being removed from the mortgage and he can't be removed from the mortgage if your lender is unwilling to do that.

You could remortgage elsewhere on a sole basis, doing a transfer of equity to remove him from the ownership as well, but that would not be on interest-only, which is now pretty much a thing of the past.

myfairlady

Thank you Kingstreet, much appreciated. Just nice to know where I stand

silvercar

He is as liable for the mortgage as you are. If you agree with your ex that you will be solely liable for mortgage payments that doesn't mean that the mortgage company won't hold him liable if you failed to make payments.

To get the mortgage lender to agree for you to take over the payments, you would need to show that you have enough income to afford the mortgage on your own.

Lenders don't usually agree to remove someone from the mortgage if they are still on the deeds of the house, sometimes they are forced into it by a court order, but you then get an odd situation where someone on the mortgage has no interest in whether or not the home is repossessed as they are not on the property deeds.

CP26

My ex and I have been divorced for 3 months and separated for almost 2 years and we still haven't sorted this same situation out.

When we split I wanted to move back to my family and he decided that he wanted to keep the house. He took on paying the mortgage and I went and rented elsewhere.

He's tried to get a mortgage on his own but the lender won't let him have one. Consequently my name is still on the mortgage and deeds, and if he were to default the mortgage company will be looking to me to pay up.

We are currently drawing up a Consent Order that says he will look to get me off the mortgage ASAP, and if he hasn't managed it in another 6 months time he'll agree to sell the property as that's the only other way I can be removed. In the order he will also indemnify me against any risks should he default.

We didn't do a separation agreement, but I imagine you can do something similar to what we've done in the order and set out the terms of how the property decision will work. I'd definitely get legal advice though to make sure the agreeement is water tight.

Land_Registry

Whilst it is possible to have a sole name on the registered title and joint names on the mortgage it is in my experience unusual to achieve this simply because the mortgage lender will often have the final say on any changes.

The terms of the actual mortgage may prohibit a change whilst with most mortgage lenders they also have a restriction on the title preventing you from transferring ownership without their consent.

In most cases when dealing with separation/divorce couples will come to some agreement/arrangement as to how things are split and so on inc the property. As others have mentioned it is probably in both your interests to get legal advice to understand what possibilities exist and in particular what needs to be put in place to cover any change in circumstances (or minds?)

ethank

You must be going through a really stressful time right now. If you can only afford the mortgage interest on your home right now, how will you ever afford to repay the capital?

I think the lender also thinks the same thing that is why they are telling you they will only lend to you on a repayment basis. They are worried too.

Sad as it is, if you are never going to be able to afford to repay the capital, this house is never going to be yours. Any equity you have in the property is likely to be very small, as you are servicing the interest only.

Would it not be better to sell up and find something you can afford on your own?

silvercar

ethank wrote: »

You must be going through a really stressful time right now. If you can only afford the mortgage interest on your home right now, how will you ever afford to repay the capital?

I think the lender also thinks the same thing that is why they are telling you they will only lend to you on a repayment basis. They are worried too.

Sad as it is, if you are never going to be able to afford to repay the capital, this house is never going to be yours. Any equity you have in the property is likely to be very small, as you are servicing the interest only.

Would it not be better to sell up and find something you can afford on your own?

If the interest only mortgage is cheaper than renting, then it makes sense. Any equity in the property could increase over the long term, so it sell now may not be the best decision.