how to take a name off of the mortgage

danelliott

I appologize if this is ni the wrong place please move to the corect location if it is wrong thank you.

Ok all, my sister has a problem at the moment and i thought someone on here may be able to help her out.

My sisters husband cheated on her and walked out leaving my sister with the 3 children.

My sister wants him off of the mortgage and so has made him a token offer which he has pretty much accepted.

The problem is my sister runs a business selling on eBay she does pretty well out of it and there is no problem regarding income as such but her mortgage company refuse to take her "husbands" name off of the mortgage papers even though he will have been paid off by my sister.

She told the mortgage company that she buys and sells on eBay and that was when they pretty much flatly refused because they say she will not be able to afford the mortgage.

Does n e 1 know how she may go about getting his name off of the papers?

Can the mortgage company refuse? or are they not allowed to refuse?

Would it make a difference if she just said she has an online store but not mention eBay? what do you think? and can any one please help?

many thanks in advance

Emmzi

The mortgage co. are quite within their rights to refuse. They are incrwasing their risk going from two borrowers to one and do not have to accept this.

Generally she needs to be able to demonstrate she can afford the mortgage alone. For a self employed person this would usually be by 2 to 3 years audited or accountant certified accounts showing a net profit. This profit/ salary is then usually mutliplied by about 3. If 3x profit = < mortgage amount, she should be ok. Otherwise she may struggle, but a whole of market broker may be able to find an alternative lender who would take on the loan.

I think sis needs a solicitor PDQ though. This is a complicated area and could bite her on the !!!...

MortgageMamma

yes the company can refuse if they dont think she has the affordability to pay the mortgage and the way she derives her income does not meet their criteria

Can your sister produce three years full accounts for the bsiness? can she evidence her last IR self assessment tax return? if so, other lenders MAY consider it.

The thing you have to consider is that mortgages can be a complex area, and so is divorce. To remove her ex off the property she may buy him out and this is called a transfer of equity, where his "PART" of the property is transferred to her name.

However, as she has children she may have a legal right to remain in the property andhave a second charge put on in his name, what thismeans is when she moves or remortgages, or when the children grow up he can then have the bit he is entitled to.

Like I say, complex area - firstly she needs legal advice, and secondly she needs to be assessed by a whole of market mortgage broker to see if she can actually afford to buy him out.

alant1000

as the people above have pointed out your sister needs to demonstrate 3 years worth of audited accounts to the mortgage provider, who will then use this for a basis to review the application. I have just come off a mortgage myself with the portman and my dad took on the mortgage 100% himself, so they basically re-did the application for him even though we were still within the tie-in period (and charged us £500 to do so).

Are you saying that your mortgage company said no before even asking to see the audited accounts, or did tey decline once they saw these? At the end of the day eBay is just a web portal for a number of businesses, and if she has a registered company / VAT number, has full audited accounts then if your mortgage company isn't interested, i'd take the business to someone who is.

If she doesnt have the above, then she stands very little chance as a good ebay account isn't going to be enough on its own to persude them of the income.

dunstonh

Is your sister doing the ebay buying and selling as a hobby or is she doing it as a business (i.e. paying class II NI, tax and keeping books)?

If it not being run as a business, apart from the potential tax evasion which the lender is obliged to report under the money laundering rules, the income doesnt exist.

It is is being run as a business, she can produce accounts to support her income claims or HMRC income

If the lender feels the income isnt enough to support the mortgage they can refuse. Indeed, they can insist on repayment if the other party refuses to pay. At the moment, both parties are jointly and equally liable.

A lot of the discussion here should be handled by her solicitor.

danelliott

It is rnu as a legitimate business and she keeps books and accounts, she has only been running it for about a year. I know this could all be over and done with by just selling the hose to get rid of her "soon to be Ex husband" but she wants to stay there because of the kids and she just wants rid of him from anything thing like this.

I appreciate all your replies and so will my sister when i tell her

cattie

If your sister has children under 16 then she should retain the right to continue to live in the family home until the youngest leaves full time education anyway.

This the provision usually made by courts in the case of divorce, so she won't have any worry about the house having to be sold & proceeds divided in such a case.

If she can't get a mortgage in her own right now, then the wisest thing to do is to leave the mortgage in joint names untill some such future time when she may be able to afford to buy him out.

MortgageMamma

Just to correct a post made above, it does not matter that your sister has only run the business for one year. if she is registered with the inland revenue as self employed and its a formal business, then there are still ways to get a mortgage without three years accounts. its called self certification. You can also include tax credits and maintenance from the ex in the affordability calculation for the mortgage, but not all lenders allow you to do this so do ensure your sister gets some professional advice. The most important bit is to see a solicitor, then work out affordability, then make the ex an offer (or not) dependent on the outcome. your sis has done things the wrong way round.

danelliott

But what if HE refuses to pay anything? is my sister still liable for the house for reposesion?

dean15

danelliott wrote: »

My sisters husband cheated on her and walked out leaving my sister with the 3 children.

My sister wants him off of the mortgage and so has made him a token offer which he has pretty much accepted.

I think your sister may be approaching this problem from the wrong angle. If she and her husband have reached an agreement, then they should see a solicitor and get a "Consent Order" drawn up. Here is brief explanation of how it works:

Consent Orders

You and your partner may be able to settle financial matters without the need to go to court. If you do then you may want the agreement put into a court order to be sure that your partner keeps to the agreement in the future.

Your solicitor can draw up a "Consent Order" which sets out the agreement reached between you and your partner. The Consent Order can deal with the division of money, property, life insurance, pensions, savings etc.

You can also agree on the amount of maintenance to be paid for the children, if you are happy to do so and this will avoid the need to apply to the Child Support Agency.

You and your partner should sign the Consent Order. You will both be required to complete a form known as a "Statement of Information" Form. You will have to give details about amongst other things, your income and capital and details of where you are living and whether you have any future plans to remarry or live with someone else.

This information is then sent to the court together with the Consent Order. It will help the court to decide whether the agreement you have reached with your partner is fair.

You will not need to attend court, the court will rubber stamp the Consent Order if they are happy with it and send it back to your solicitors.

If they are not happy with the Consent Order they may ask your solicitors to send them more information or attend court to discuss the contents of the Consent Order and the Statement of Information.

The Consent Order acts as a contract between yourself and your partner. If your partner breaks the agreement you can go back to court to enforce the agreement against your partner.


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I.e. your sister's husband could agree to transfer his share (equity) of the property to your sister (in return for a lump sum?).

This way she can avoid involving the building society and still have total control of the property.

I hope this helps, but she really should see a solicitor who specialises in family law for legal advice regarding this matter. As her present arrangement with her husband is not legally binding, and he may change his mind sometime in the future - especially if he decides to have children with his new partner.

Because without a consent order, even if he and the building society agree to remove his name from the mortgage, he can still register an interest in the family home at a later date via a solicitor. I.e. he can ask for a share of any future equity/profit, if/when the house is sold.

Which means she would be unable to sell her home without his agreement/involvement - regardless of who has been paying the mortgage.

Oh, one more thing... I'd get an order drawn-up & submitted for approval by the court asap, while he's still feeling a bit guilty and things are (from the sound of it) still amicable.

jamesd

Your sister is liable for the whole mortgage. He is also liable for the whole mortgage. If there is a problem with payments they will seek the money from whoever they can get it from, up to the full mortgage amount plus all of their costs. They can and will repossess the property if the payments aren't made, then they will seek repayment of any shortfall from both of them until they have all of the money. They don't care who isn't making payments just that they aren't made. It's a secured loan and repossessing is how they get the money from their security - the home - if the mortgage payments aren't made.

That's why they will not take him off the mortgage until they are sure that she can afford the mortgage herself: they lose the ability to chase him if they do it.

Self-certification mortgages are available but are usually at higher interest rates than standard mortgages. Unless there's a clear need to get him off the mortgage now she's going to be paying avoidably higher mortgage payments because of it.