Tricky Situation

minnarory

I own a property in a small amount of negative equity. Approximately £10k.
I have 20 years of a 30 year mortgage outstanding.
Three years ago I completed a lump sum IVA.
There are loans from prior to the IVA which were included in the IVA that appear as still active and in monthly defaults. I don't currently have the paperwork on the IVA to resolve this.
Therefore my credit score is dire with new defaults every month.
Earlier this year my parents bought me a house which is in mine and my partner's name now. I pay my parents informally for this property. However, on paper the new house is owned by me and my partner outright.
Over the summer I put my mortgaged property on the market and recently dropped the price and got an asking price offer. The offer is for less than the outstanding balance by about £10k including fees etc.
I have spoken to my mortgage company - Kensington - a sub-prime lender - and they have requested a RICS Valuation and sending me some paperwork for a 'shortfall application'.
The advisor was pleasant but not very knowledgeable.
One thing we are considering doing is taking a mortgage out on the new property to make good the shortfall.
The advisor said this would be fine and if I was going to do this then I would need to find some proof of funds and where they come from etc.
I think that having me on a joint mortgage would be a disaster, we might not get one with my credit or have awful terms.
My questions:
Will my partner be able to get out the mortgage on our jointly owned property alone?
Should I press on with the solicitors for the conveyancing - will they progress with shortfall?
Should I instruct and RICS valuation survey and proceed with the shortfall application?

Any advice gratefully received.

AllyMac

This advice is from a moral rather than legal standpoint... I think you should talk this through with your mum and dad.
They have been very generous to you, and frankly I cannot believe that they have just given the house to a child's girl/boyfriend too!

Even though the house is legally yours, I think it is fair that you involve them in this decision. If I were them I would be unhappy that I gave you a house and in no time at all your girl/boyfriend is taking money from it. It's not that I don't think that is the best solution, but I think you have an obligation to involve your parents.

Can you pay your mortgage now? Is it a rising market in your area? I think my solution would be to stay on the market waiting for an offer that will pay off your mortgage - and in the meantime saving like crazy to overpay so that the offer can be lower.

I am feeling averse to the idea that you have an amazing gift of an asset, but very quickly choose borrowing against it as your solution.

What's going on with not having the IVA paperwork?

minnarory

Thanks for your reply. I mustn't have explained myself very well!
My parents bought my partner and I a house because we were very much stuck in negative equity and unable to see a way out. It is indeed very generous, however we will be paying my parents back a significant amount of money.
They are well aware that we will have to borrow to make the shortfall, it is not something being done behind their back without their knowledge or approval.
Until we have sold the old property we cannot afford to pay back my parents, therefore it is in everyone's interests to get out of the old property ASAP.
My question was whether my partner will be able to borrow the money in his name or whether both of us will have to because it is jointly owned?
Also I have spoken to the lender today and they have sent me a 'shortfall application' and advised to have a RICS valuation before I can commence conveyancing.
There is no guarantee we will get a mortgage, but paying back the shortfall as a loan, most likely high interest, is not really an option.

Pixie5740

Not many lenders allow one person named on the mortgage and two on the deeds.