Joint to sole owner - Advice desparately needed

PugLover_2 · 4 September 2017 at 9:36AM

Hi,

In October of last year myself and my partner got a mortgage with Nationwide as first time buyers. Fast forward to three weeks ago - the relationship has fully broken down and we are currently albeit awkwardly continuing to cohabit together in our house.

My partner has expressed that his ideal scenario would be to transfer the mortgage and title into my name only so he can move on with no mortgage against his name. This is my ideal outcome also. I absolutely adore my home and with the timespan here being so short to sell up would leave us with little gain and to be honestly most likely we'd make a loss.

I have spoken to Nationwide about concerns with my affordability. For example, my affordability for a mortgage would be around the £110,000 as a first time buyer and our mortgage is currently 80% LTV with £158,000. I know personally I can afford my mortgage repayments no problem - the rent I paid alone on my previous property was the same in value and I have had a few pay increases since then!

Nationwide informed me that a possible option for us would be for me to prove over a period of three months that I can afford the mortgage on my own. This information would be forwarded to an underwriter who would take this information into account to see if they would allow my partners name to be removed from the mortgage.

Any direction and advice is really appreciated - I don't know if this is a common direction for a mortgage lender to take and if it usually a successful way to overcome stringent affordability rules? The mortgage term is currently 30 years - would changing the term to 40 years work in my favour so the monthly cost is lower?

Also we are unmarried, 50/50 joint sole owners, I am 29 years old, I have a great credit score and my job is on a permanent basis.
Thank you so much! :j

Lilla_D · 4 September 2017 at 10:17PM

Well, you can always try what they suggest and in worst case scenario you get a no and your partner is not removed, but you may get lucky. I've never heard of what they said they'd do, but stranger things have happened, so who knows?

However, you may want to talk to a solicitor or tax advisor regarding the stamp duty implications, as effectively you're buying half a property and taking on an extra mortgage amount. As a mortgage broker I can't advise you on the specifics, I can only recommend that you seek professional advice.

As a last point, if Nationwide says "no", you could always speak to a broker and see if there's a lender out there who could give you the required £158k, even if it means paying an early repayment charge. In the grand scheme of things, paying a few thousand pounds penalty may be worth having the property to yourself, so you can both move on.

Whichever route you take, you may want to discuss the associated costs with your (ex)partner, so it's not just you taking the hit for the stamp duty, early repayment charge, solicitor fee, etc.

Thrugelmir · 4 September 2017 at 10:50PM

Is you ex not expecting to receive a share of the equity that's in the property?

Lenders are themselves regulated when it comes to their affordability policies. Breaking rules simply isn't worth the risk.

Sarastro · 8 September 2017 at 4:02PM

I'd definitely say you need independent legal advice to ensure that your ex cannot return with a claim on the equity at some point in the future.
And, if your salary has gone up it is probably worth talking to other lenders as acceptance criteria varies so others may be less stringent. If you are short a little on a mortgage, you might consider a loan or even interest free credit card to make up the shortfall - although you will need to work out repayments and ensure you can afford to repay these before the interest free offer runs out. This doesn't sound like great advice, but the aim is for you to keep the house.
If you do re-mortgage, try and push the value of the house up as this will reduce the LTV ratio and the lower it is, generally the better as there will be more products available.
Increasing the term will reduce the monthly payment, but the total you payback overall would be much higher so avoid this if you can. Might be better to remortgage on a longer term now (to get the affordability) with a view to re-mortgaging in a few years' time and reducing the term then.
Get advice and shop around in short!

Joint to sole owner - Advice desparately needed

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