Help To Buy Problem

kingstreet

The "book" answer here and what I'd expect a solicitor to explain is that upto completion, any change in circumstances should be reported to the lender, to give it an opportunity to decide if it still wishes to lend.

Unfortunately, one of the borrowers no longer wishing to live in the property is a material change.

Finally, you are not thinking about the equity loan. It is not straightforward removing a borrower from the equity loan liability. You should speak to the HTB Agent and this is the site for the post-sale agent, which will deal with the fall-out of this;-

http://www.myfirsthome.org.uk/content/1/128/change-of-ownership.html

TBH I've given my opinion and you will do what you think best meets your daughter's interests. I hope it works out.

mickflynn39

kingstreet wrote: »

The "book" answer here and what I'd expect a solicitor to explain is that upto completion, any change in circumstances should be reported to the lender, to give it an opportunity to decide if it still wishes to lend.

Unfortunately, one of the borrowers no longer wishing to live in the property is a material change.

Finally, you are not thinking about the equity loan. It is not straightforward removing a borrower from the equity loan liability. You should speak to the HTB Agent and this is the site for the post-sale agent, which will deal with the fall-out of this;-

http://www.myfirsthome.org.uk/content/1/128/change-of-ownership.html

TBH I've given my opinion and you will do what you think best meets your daughter's interests. I hope it works out.

I was going to contact the lender but the solicitor advised me not to. With hindsight she has probably 'bent' the rules a bit but has put us in a position where the lender will be more favourably inclined to help us sort the problem than they may otherwise have been. Withdrawing their offer just before completion would have totally finished my daughter off coming on top of the relationship breakdown.

She had also already given notice on where she was renting and would have ended up 'homeless' on 22.9.2014 if the completion had been delayed/cancelled due to the lender withdrawing their offer.

So I'm glad the solicitor advised me as she did and didn't play by the rules.

I realise his name needs removing from the HTB agreement. My understanding is that they are happy to let her keep the deal as long as the lender is happy to let her still have the mortgage. That's my understanding having been on their website.

Thanks for all your advice and help.

silvercar

On the facts,

The ex exchanged contracts ie signed up that he was going to live in the property, then within a matter of days/ weeks decided that he wasn't going to. Who knows what he will do next week?

mickflynn39

silvercar wrote: »

On the facts,

The ex exchanged contracts ie signed up that he was going to live in the property, then within a matter of days/ weeks decided that he wasn't going to. Who knows what he will do next week?

For all we know he could quite easily change his mind and come crawling back. I wouldn't be surprised. I'm hoping she doesn't have him back as he has proved totally unreliable and fickle with his behaviour. I don't think she will, but you never know.

If she does have him back then everything is hunky dory as far as the lender and HTB are concerned. It would be as though nothing had happened.

silvercar

mickflynn39 wrote: »

For all we know he could quite easily change his mind and come crawling back. I wouldn't be surprised. I'm hoping she doesn't have him back as he has proved totally unreliable and fickle with his behaviour. I don't think she will, but you never know.

If she does have him back then everything is hunky dory as far as the lender and HTB are concerned. It would be as though nothing had happened.

Exactly, which is why there is little value in notifying anyone that they are dealing with someone so fickle.

I hope he understands that entering a mortgage is not something he can walk away from as easy as he can walk away from your daughter.

ethank

mickflynn39 wrote: »

I was going to contact the lender but the solicitor advised me not to. With hindsight she has probably 'bent' the rules a bit but has put us in a position where the lender will be more favourably inclined to help us sort the problem than they may otherwise have been.

The solicitor acts for the lender also, and although it appears to have slightly bent the rules, the lender could finish that solicitor's career - technically what happened was mortgage fraud. The solicitor made a decision which did not represent the lenders interest in the property well, and therefore could face disciplinary action from the SRA if it came out.

The best thing for everyone when talking to the lender is be quiet that this all happened before completion.

Wish your daughter all the best, and I hope she enjoys her new home tomorrow.

mickflynn39

ethank wrote: »

The solicitor acts for the lender also, and although it appears to have slightly bent the rules, the lender could finish that solicitor's career - technically what happened was mortgage fraud. The solicitor made a decision which did not represent the lenders interest in the property well, and therefore could face disciplinary action from the SRA if it came out.

The best thing for everyone when talking to the lender is be quiet that this all happened before completion.

Wish your daughter all the best, and I hope she enjoys her new home tomorrow.

Thanks. We won't be dropping the solicitor in it.

mickflynn39

Had a meeting with the Nationwide yesterday. The best option is to carry on with the 25 year mortgage (they won't let her convert it to a 35 year one to reduce monthly payments). They won't let parents guarantee the mortgage or go on the mortgage instead of her ex.

They will need to credit score her before changing any of the current mortgage details. They advised she is likely to fail at the moment as her rating will have taken a hit due to recently taking out a mortgage. It could take 6 months before it recovers enough for them to be able to let her have a mortgage on her own.

As parents we would have to pay off the difference between how much they will lend her and the current outstanding amount. This will cost us about £22k. To get rid of the ex off the mortgage there would be a £150 fee to 'transfer the equity'. Then there would be solicitors fees on top to get him off the title deeds etc. Help to Buy would also need to sort out a 'Deed of Release'. I don't know what the cost implications are of this at the moment.

As its a 5 year fixed mortgage there would be a 4% Early Repayment Charge on anything above 10% of the initial mortgage so about £480 if we did it within the first 12 months of the mortgage.

The ex still wants his £10k asap. He's asked if we could just draw up something in writing between ourselves without involving solicitors to keep costs down. Obviously we are not going to do this. He is naive in the extreme.

For the purposes of working out annual commission for my daughter they just look at the last 3 months commission earned and then pro rata it for a year.

We've decided to carry on with the existing mortgage and wait 12 months before trying to get him off it. My daughter has a promotion coming before then and a significant pay rise. She may well then be in a position to afford the mortgage on her own. She's also taking in a lodger which will generate £350 per month. However Nationwide won't consider this when evaluating her income for affordability purposes.

By waiting 12 months she will also have a track record with the Nationwide which should help. We intend to help her pay off 10% of the mortgage over this period. This will then mean there won't be any Early Repayment Charge if we need to help reduce the outstanding mortgage in 12 months.

The ex doesn't yet know that this is how things are going to pan out and is hopeful he'll be getting his money sooner rather than later. He's in for a surprise.

Pixie5740

I'm glad you and your daughter have managed to fine a way forward.

The ex is dreaming if he thinks he can get his money back so quickly after causing this stromash. All without involving solicitors or any loss of money to him. :rotfl::rotfl::rotfl:

I wonder if, because his name will be on the deeds and mortgage, if he'll want to move in when the penny drops. I guess that's a bridge to cross if/when it happens.

mickflynn39

I don't think he dare try to move in. I'm ready for him if he tries.