Completely lost

kellbing

Mortgage details:
APRIL 2008
LTV 125%
Alliance and Leicester
25 years - 18 remain
65k approx on first part
10k approx on secured loan

Split up with my ex partner 2 years ago I moved in with parents as he had nowhere else to go. We are currently each paying half of monthly mortgage payment of £434. Put the house up for sale based on valuation of 85k approx 1 year ago had lots of viewings but just one ridiculous offer since dropped it to offers over 69995. I moved in my house a year ago with my partner and start maternity leave in a week at 39 weeks pregnant. There is no way I can make the payment once on SMP as I get just £600 (half of my current salary) The bank dont want to help stating that if I want to get off the mortgage the secured loan part needs to be paid (I obviously don't have 10k! ) and our mortgage does not have the option of a payment holiday. I don't know what to do! What position will I be in if I don't make the payments? Feel stressed and stuck

silvercar

If you do sell you will need to find 65k+10K+ legal fees + estate agent fees.
Otherwise the lender can block the sale.

Who is living there now? Would taking a lodger be an option? Or renting it out?

Thrugelmir

kellbing wrote: »

The bank dont want to help (

Not the banks problem to resolve. Can your ex not afford the mortgage as it stands in their own right?

kellbing

Thank you for your replies.

My ex lives there now and he can afford it on his own but they want the secured loan paid off to take my name off the mortgage.

Its not possible to rent as the house needs some work doing to it and we don't have any to do it up.

Annisele

If your ex lives there alone, and can afford to pay the mortgage alone - why isn't he doing that?

I appreciate there are lots of good reasons why he might not be, but I wonder which one it is. On the face of it, he's got the good end of this particular deal!

kellbing

I have carried on paying as I thought that not doing would put me in a worse position I'd like to just sign it over to him but they want the secured loan paid surely there is a way around that?

Annisele

I understand why you're still named on the mortgage. What I don't understand is why you're still paying half the monthly cost.

You and your ex are jointly and severally liable for the monthly payments. That means the lender doesn't care which of you pays, or what proportion you pay in - the lender just cares that it gets its money.

The private agreement that you've come to with your ex (apparently that you'll each pay half) is nothing to do with the lender. Ultimately, if that agreement breaks down (because you can't afford it) then your ex is either going to have to pay the whole amount himself, or watch his credit rating get trashed.

If you're still on reasonably good terms with your ex, you need to talk to him. For example, if there's more than one bedroom, would he take a lodger? If he won't take a lodger, is that fair to you?

silvercar

kellbing wrote: »

I have carried on paying as I thought that not doing would put me in a worse position I'd like to just sign it over to him but they want the secured loan paid surely there is a way around that?

This is a joint responsibility. I would suggest that if the ex has sole use of the property, he should be paying the majority of the mortgage. If you sign the property over to him, he will benefit by all the future gain in value. He also gains by not having to move. The other option is selling it, in which case he would have to contribute to the estate agent fees and legal costs plus have the costs of finding somewhere else to live.

Look at it this way. What is the rental of a similar property? If you are paying half the mortgage, he should be paying you half the rental as he is effectively renting half the property off you.

How much could he afford to pay towards the secured loan?

The other option is for him to increase the mortgage through a different lender, assuming the current lender won't let him do so.

King_Slayer

Is the secured Liam solely your responsibility? Is there any reason he isn't willing to contribute towards it, so that you can sign over to him?

I assume that you won't want to ruin your credit, hence the reason you continued paying have the mortgage (as stated above - it is a joint responsibility), however if he's living there he's got the better end of the bargain.

kellbing

The secured loan is joint responsibility but neither of us have 10k to pay this. What would you suggest that I propose he pays the full mortgage? My credit rating has one year left of a default then hopefully I can look to rebuild it so I don't want to put another default on there for 6 years if I can help it.

silvercar

kellbing wrote: »

The secured loan is joint responsibility but neither of us have 10k to pay this. What would you suggest that I propose he pays the full mortgage? My credit rating has one year left of a default then hopefully I can look to rebuild it so I don't want to put another default on there for 6 years if I can help it.

Assuming the secured loan was used to improve the property, then really it was part of the mortgage to buy. So the fact that there are 2 parts to the money borrowed doesn't alter the fact it is tied to the property.

Really I would suggest that he takes a mortgage elsewhere to cover the current mortgage and the secured loan. If he is unable and unwilling to do this then the next option is to sell the property and pay off the mortgage and the loan.

These are the only 2 ways I can see that will give you the financial separation that you want. Clearly the financial separation has a value to you (emotional/ no risk to your credit rating/ no debt in your name), so it would not be unreasonable for you to contribute financially if that is what is needed to make it happen.

Of course if the secured loan was used to fund personal or joint spending then you also have a moral obligation to contribute.