second and third charges

Charlesville

I have a second charge on the formal matrimonial home to the value of 50% of the equity, this was set (in order to avoid having to sell the house) with a Consent Order through the courts as part of the divorce. My ex-wife now needs to take out a secured loan against the property and the new lender will not do without me removing my second charge. I am happy in principal to do this to help but will eventually need my share of the equity to pay loans and avoid me lossing my new house. She has suggested taking my charge off then reapplying as a third charge after the new loan is set up. Again I am happy in principle but can the first & second charge holders prevent this? and if they cant how do you go about removing a charge without incuring lots of costs? I cant afford to hand this over to a solicitor.

DevCoder

Yes they can prevent this from happening.

By you becoming third charge, you are lower down the pecking order if the house has to be sold.

bargainbetty

Do you know how much your ex-wife plans to secure against the property? If it is sufficient to need your charge removed, then it may be large enough to prevent you from claiming your full share of the equity later. What if the debt is such that the remaining value of the property doesn't cover your 'third' charge?

Personally, I'd refuse to remove it unless the ex agrees to secure a loan big enough to pay you your share now.

longtermplanner

Don't do this - tell your ex to find a solution that doesn't involve a secured loan.

Suggest that she remorgages to pay you off then she can do what she likes.