Need some urgent advice

Comms69

Here's how you force it.


You move back in.


Job done.

Slithery

You have two sensible options...

Let her get her own mortgage on the property and buy you out of your half.
Sell up and split the profit/loss.

Anything else is a bad idea.

Section106

paulr23 wrote: »

....however I will stay on the mortgage and she will own 100% of the house through the trust document and be 'liable for all mortgage payments' as it apparently will say on this document.

This document won't mean anything. If you are joint and severally liable to the mortgage company then nothing you agree with your ex has any impact on your individual liability to the mortgage company.

If the ex stops paying, the mortgage company can come after you for the money instead. If that happens then your agreement with the ex would have the effect of creating a debt between the two of you (she would owe you money).

However, if the reason she stops paying the mortgage is debt problems then she might decide to go bankrupt or enter into an IVA. In which case the debt she owes you may become unrecoverable.

And even if she didn't go down the bankruptcy/IVA route due to debt issues, you would probably need to take legal action to get her to pay a single penny of what you are owed.

...as I do not want to get a shot credit rating (owned a house for 6 months then sold it doesnt look great in terms of responsibility).

Others have already said it, but it is worth repeating. Selling a house will have no impact on your credit rating. A default on a joint mortgage would have an impact though.

paulr23 wrote: »

Problem is with this that I know that I will probably never own another house in the near future, if at all, so giving someone my house is not an easy task...

It is a really bad idea to think like this. Don't get emotionally attached to the building.....

paulr23 wrote: »

Well there is the scenario of if I sell the house I will basically lose everything I invested as the house would have lost value (was a new build) so expected to sell for around £200-205k according to others on the market. Bought for 215k

....because in reality the house isn't yours. It belongs to the mortgage company. By the time you've had estate agent and legal fees, on top of the loss of value, and any early redemption charge, you will probably find there is nothing left of the money you put in. You may need to find additional money to clear the mortgage.

The house is a potential albatross around your neck. You need to weigh up what you might lose now, compared to what you could lose if things get worse.

For example, if the ex stops paying the house insurance and the house burns down, you will still need to repay the mortgage company all the money you owe them. Do you want to be in a position where you have to check with the ex on a regular basis that they are still paying the insurance?

Bottom line is that if they have a relative who would be willing to come in now, then why wait? Negotiate a fair value for your share (which might be zero and still a good deal), make sure your liabilities are being removed, and then enjoy the freedom to move on with your life.

GDB2222

The early redemption charge on the mortgage could amount to £10,000, I'm afraid. There's also estate agent fees, etc. I suggest finding out what your downside really is. Possibly, there are other ways to avoid that, eg renting the property out.

I agree with the others that your proposed solution looks very unwise.

steampowered

paulr23 wrote: »

I'm being a bit naive and taking her word for it as she tells me she will take me from the mortgage whenever.

The best "whenever", is now.

The ex can only take you "off the mortgage" if she can afford to remortgage the property on her sole income. If she can't afford to do that now, there is no reason to see why she would be able to do it in future.

gettingtheresometime

Also won't you be financially linked to her by the virtue of having the joint mortgage.

deFoix

You did a foolish thing by moving out of your own house. The courts can and will use that fact against you if it came to it.

I would move back in until you can sell it. Why should she get to live there.

MEM62

paulr23 wrote: »

I'm not sure if this is an insanely stupid idea or not.

Let's be clear, it is stratospherically stupid.

Your mortgage lender is not bound by the terms of any deed of trust between you and your ex and you will be on the hook no matter what. If she defaults, you are screwed.

In the scenario you are proposing she acquires, 100% of the asset and you, under the terms of joint and several liability, retain 100% of the liability. In addition to which you are putting yourself in a position where a decision that an ex makes can wreck your finances.

TBagpuss

It's not necessarily a terrible idea to delay selling the house and to have a declaration of trust, but the terms sheis siuggestingre very bad for you.

Look at the figures. If you sell now, how much will be left after the mortgage, sale costs, penelties and legal fees have all ben paid?

If you were to delay the sale for a year or so until the current mortgage deal ends, how much will that save you?

If you dcide to wait, then you shoukld have a formal deed of spearation which should include :
1. A fixed agreement for a date on which either she pays you your money and gets your name off the mortgage, or the house is sold.
2. Provision for your interest in the property to be % of the property value, not a fixed lump sum, so if property prices go up,so does the sum that you get.

3. Explicit provision that she is responsible for paying the mortgage, bills, insurance etc and for indemnifying yo (i.e. a specific statement that anything you pay towards those things is refunded to you out of hershare of the sale proceeds, with interest, on the sale of the house)

4. A requirement for her to keep the house in good condition and to provide proof to you on request that there is valid insurance etc in place.

If the timescale for her to buy you out is any more than a year, you probably also need the agreement to explicitly provide thateither of you can require that the house is sold by giving (say) 3 months notice to the other.

The risks you take are that if she doesn't pay the mortgage, you are still liable to the lender, and you could end up with a damaged credit record if she gets into finacial difficulty. If there is not much equity, then you may also not get back what you invested if house prices fall or don't go up over the next year or so.

TBagpuss

PS - even if you were willing to agree to her suggestion,yoiu ned a professionally drawn up agreement which, at the very least, allows you to give notice and trigger a sale as and when you ned your money.

ut theamount you get would need to be either a % of the value, or your original investment + ongoinginterest until you are paid out, otherwise you are lending her the money interest free and getting no return at all on your funds.