mortgage shortfall showing as default mortgage

HarveyB13

Long story short I bought a house with my ex however it was in negative equity.  The house was sold in 2016 and there was a shortfall on the mortgage.  So we now owe 90k between us and have both been paying a monthly payment on this debt.  I am in the process of trying to buy a house with my new partner but obviously cannot get a mortgage due to this outstanding debt.  One mortgage broker suggested that the shortfall should be an unsecured loan at this stage but is still showing as a mortgage (even though is no longer attached to any property?) - is he correct? Is it possible to have the mortgage reported as a loan? I may be eligible to get another mortgage if this is the case.

[Deleted User]

If you have a large debt then giving it a different classification isn't going to mean lenders won't consider it, you owe the whole debt jointly with the ex so if one stops paying the other is liable for it all - thus that debt will be considered as part of the amount you can borrow.

HarveyB13

thank for your reply Farfetch - basically I have found a lender that will accept it if it is just a 'loan' and not a 'mortgage' so having it reclassified would be beneficial - I am just unsure if it is possible?

sourcrates

The mortgage ceased to be secured when the house was sold, its now a mortgage shortfall debt, unsecured as you suspect, although getting it re-classified is not something I've ever seen done.