Divorce, negative equity, what is the situation for my partner?

TheSilentMeow

My fiance is currently paying the mortgage on the house he owned with his ex wife, she basically decided to move up north with the man she left him for after living in it herself, with the boyfriend, for a year after they split. She told him she wanted nothing to do with the house after, and that she wanted him to only have it in his name. When I heard this I encouraged him to get the house valued and it turned out it was £15k - £20k in negative equity! So it is obvious why she wanted rid of it. However up until this point, he had agreed to take on the house and let her move on, in the belief that he could turn the situation around and renovate the it to sell on for a profit. After we found out about the negative equity, we told her about it and that we weren't going to be taking her name off, and that she was obligated to pay half towards it, but she ignored us and just buried her head on the whole issue. We have been told by the mortgage company that they don't really care where the mortgage repayments come from, as long as they are paid and if they stop, they will chase both parties. Repayments are £700-odd a month!

That was a year ago, we really want to leave and move into my old flat that I have been letting for the past few years as it is going to be available early next year, and it would cost us half of what we pay now to live there, but we can't sell the house unless the negative equity is paid; we can't afford it on our own and why should we? We would take out a loan for our half gladly though, but she won't even acknowledge any of her responsibilities. By the way renting is out of the question too, rental yield would only be £550 if we were really lucky, the house is nice now after we have done it up, but it is a three bed semi, and not in a great area of Birmingham.

My question is that if my fiance loses his job, and cannot pay the mortgage, and can prove he has no income, what will the situation be with the repayments? She currently has a good job £40k a year, however the mortgage company does not know her new address and told us the only way she could update it is to send a utility bill with evidence of the new address, but why would she do this? She doesn't want them chasing her. I really need to know where he would stand in this situation.

Thanks for taking the time to read my post, sorry it's a bit long.

kingstreet

If no-one pays the mortgage, eventually the property will be repossessed, sold for what the lender can get, then both parties will be chased for the shortfall for upto twelve years.

Both credit files will be trashed.

Thrugelmir

Use the equity in your flat to inject capital into the property. At the same time remortgaging into your joint names.

May not be your ideal solution but at least it's positive. Means that everyone can move on with there lives. The ties of old can be severed.

Is the mortgage currently on a repayment basis?

amnblog

If you have the sufficient equity realisable in your flat you could use it to put into the house to re-mortgage it on a buy to let interest only basis. It that way you can put it into your joint names, removing the ex and it may then cover the mortgage payments if you rent it out.