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i have separated from my partner, I want to keep the house, but what do I do if the bank refuses to tranfer the mortgage to me??

by Gemmma 24 June 2010 |

15 comments | Love

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hello, I currently have a joint mortgage with my ex partner of 9 years. We are in a fixed term for another year so to sell we will incurr very high penalties. There is also work needed to be done on the house to be able to sell it for what we paid for it. Basically its in negative equity. My partner is happy for me to take on the house and he will finish & pay for the work / pay me half the neg equity. I have been in touch with the bank and applied for it to be tranfered but im getting worried that I wont be accepted. I am just wondering if anyone knows what options I have if the bank say no?? I've sent a form detailing everything I can to prove I can afford it on my own.

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410

manzanilla posted
Do you have enough income for the bank to loan you the amount of the mortgagte on your salary alone? If you don't, then the bank will refuse and there will be nothing that you can do about it.
No other bank will lend you the money because it is in negative equity.
Posted on 24 June 2010 | Love 2 loves Report
804

MikeGG1 posted
Is your income more than one third of the outstanding mortgage? If so, the bank should agree to the transfer.
If not, do you have anyone who would stand as guarantor? But before you ask someone, such as parents, consider what the mortgage cost might be if interest rates went up several %, which could well happen? Would you be able to meet the payments then?
Mike
Posted on 24 June 2010 | Love 1 love Report
212

SoftwareBear posted
hmm ... why do you want your ex to pay you money to cover half the negative equity ?
This may seem generous ... but what for ... the lost money doesn't actually exist until you realise the capital in the property and incur the loss.
It also sounds like a strange thing to accept and could look odd if any future disputes arise over the property.
Posted on 25 June 2010 | Love 0 loves Report
62

TheWelshman posted
Hi Gemmma
Just because your existing lender is not available to help you can still switch it to another lender? Obviously if you are tied in with your existing lender there would be early repayment charges?
If you would like lovemoney.com to do some research for you then drop me an email tim@lovemoney.com or give me a call on 0207 297 8163.
Regards
Tim
Posted on 25 June 2010 | Love 0 loves Report
804

MikeGG1 posted
Tim
Isn't she tied to the existing lender because she is in negative equity?
Mike
Posted on 25 June 2010 | Love 0 loves Report
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Gemmma posted
hello thanks for all your replies. Basically we bought the house 4 years ago for 117k on a 100% mortgage and have 1 yr left in the fixed term. to sell now the penalty is £4k I have had the house valued in its current state and its worth 112k or maybe less with the work finished 2 estate agents said we'd maybe get what we paid for it.
My partner is happy for me to keep the house, as it will save us both a lot of money, and he gets to move on asap without having to keep paying a mortgage while we sell. he is more than happy to finish the work or pay me half of what we'd loose. He says hes still getting out better off, without the fees to sell, and the penalty .....
the bank initially said it should be fine for me to take on the mortgage, if i got rid of my debt ( a small car loan) i paid off the loan but now they are saying its not gone through and i've had to appeal. I'm lucky and have generous parents who are helping any way they can but the bank will not accept them as guarantor. the fixed interest rate is high, as we got a 100% mortgage but in 12months it will drop to a variable and I will be in a better position financially.
my partner is being very helpful at the minute... guilt i suppose but im not expecting it to last. I am fully aware how ugly these things can get, and although hes all smiles & promises, im sure his new partner is chipping away at it. I just want to get it sorted asap.
Posted on 25 June 2010 | Love 0 loves Report
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MikeGG1 posted
Gemma
If you bought on a 100% mortgage 4 years ago, how much is the outstanding mortgage now? Unless you are on an interest-only mortgage, there will have been some reduction in 4 years.
Mike
Posted on 25 June 2010 | Love 0 loves Report
212

SoftwareBear posted
I'm guessing maybe £1000 a year at the most has been paid off unless overpayments have been paid so lets say 4K for the four years.
The costs ...
117K - 4K = 113K mortgage
4K fees if you close the mortgage before the deal ends
= 117K to clear the mortgage
plus 1.5K for estate agent fees ... 0.5K for solicitor fees ... plus removal fees etc.
The income ...
112K property value with the work doing,
Was that the price they would advertise it at or the price they think you will get ?
What is the value of the property as it is now ?
How much is the work going to cost to get done ?
Something doesn't feel right about this.
If you both continue to own the property ... you can both pay the mortgage and split the costs of the maintenance/improvements if you both choose to do them and sell the property when the fixed deal ends ... or before ... jointly absorbing the costs.
If you own it alone ... you can either live there forever ... or wait for the deal to end then sell ... or sell now take the hit ... you can choose to get the work done or live with it
If you can't afford it alone ... you get repossessed ... get the bad credit ratings / bankrupt ... loose the house and get a large debt to pay .. and an awful lot of stress.
He may be offering you money to cover the mortgage payments between now and when you sell ... but when will that be ... when will he stop giving you money ... currently he is legally bound to pay the mortgage jointly ... if you transfer it away then you don't get that safety net ... and he can stop giving you money quite happily ?
To my view ... you are safer (if less convenient) keeping the property jointly held until you both sell it.
Posted on 26 June 2010 | Love 0 loves Report
1

jonprogers posted
I was in a similar (but not identical) situation just over a year ago, my lender was happy for me to transfer the mortgage into my sole name as long as I could meet the relevant lending criteria and let me keep my current rates etc. (my initial deal had ended and I was and still am on an SVR of base plus two point something).
The thing they were bothered about was if I could afford it (together with the admin fees) and nothing else.
Hope this helps...
Posted on 26 June 2010 | Love 0 loves Report
25

Mick James posted
The real issue is whether the bank will release your partner from his obligation to pay them the money they lent you jointly, as currently it can pursue both, or either of you separately for any arrears. In the current climate it's very hard to see how a financial institution would expose itself to extra risk when it currently has both of you over the barrel.
On the other hand thre's not much they can do about you living there as long as you continue to pay the mortgage.
Control of the situation therefore rests with your ex-partner, as being tied in in this way will constrain his ability to get a mortgage and also leave him vulnerable should you default--which will cost him more money and hurt his credit rating. If he doesn't like the situation and decides to force a sale it would be hard to blame him. Since you want to take the whole mortgage on anyway it would seem fair that you take on the whole of the payments as well.
At the moment you are all in a tricky situation (including the bank)--the best advice I can offer is to try and keep the whole thing ticking over until your current deal ends and you can renegotiate from (hopefully) a position of more strength. In the meantime I'd keep chipping away at the bank and get something on paper with your ex as to how you plan to end this thing, how to deal with any positive/negative equity etc.
You didn't mention how big the house is, whether any children are involved etc. If you could squeeze a lodger into the scenario that might make a difference.
Posted on 28 June 2010 | Love 0 loves Report
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Gemmma posted
the house is currently worth 112k in its current state - unfinished. there isnt a lot of work to do, a ceiling to be put up and plasterboarded etc, then general cosmetics. 3k max. one estate agent valued it finished at 117k but another said up to 125k.the current outstanding mortgage is 113k
It definatley doesnt make sense to sell now, with the penalties although like you all say that lies in the hands of my partner. At the minute its all nice and he wants to do 'right by me' although I cant say that will last. If we do sell however its going to cost us both.
If the bank says no to giving me the mortgage on my own and I can persuade my partner to keep the house until the fixed deal ends but with me paying the mortgage in full, is there anything I can have written legally that basically says as long as I havent defaulted on payments (caused any problems for him) he is not entitled to make me sell / to any of the profits?
no children are involved and its is a 2 soon to be 3 bedroom terrace. I can afford it on my own - just not in the eyes of the bank I dont think - but if things do get tight there would be more than enough room for a lodger.
He is paying half the mortgage this month but we have agreed that since I am trying to take on the property he wont pay next month.
Posted on 28 June 2010 | Love 0 loves Report
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losrios posted
I'm in a very similar situation, although my husband has just walked away and has not contributed to the mortgage for 18 months. He won't contribute, he won't even discuss how to proceed and so I'm left paying the full mortgage on my own but can't get him off the mortgage because he won't sign the papers. Even more difficult because I no longer know where he is!!
Not sure what options are available to me so currently I'm left paying for a house that I assume he could one day turn up and demand half of!
I will be watching the outcome of this thread with great interest.
Gemmma - I hope you get the answer you want from your bank.
Posted on 28 June 2010 | Love 0 loves Report
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essexfairy posted
I was also in a similar situation to losrios. Unfortunately during divorce proceedings my ex, despitre not having put down any of the initial £7k deposit, getting the mortgage into arrears which I had to sort out and not contributing to the mortgage for a good 12 months, walked away with half of the money. That's the problem with having someone on a mortgage who no longer lives there - in the eyes of the law they are still entitled to half of everything despite not paying.
If I were you Gemma I would insist that he continues to pay half the mortgage whether he is living there or not. It is still half his debt afterall and if he is going to potentially reap half the benefits if you have to sell.
I was very fortunate that my Mum was able to help me buy my ex out of the house and since I had been solely paying the mortgage for a year then that put me in a really good position to show that I was able to afford it but I know that not everyone is that lucky.
Which bank are you with? I was with Barclays and they couldn't have been more helpful, even when I was a few thousand short on my wage to actually be able to take out the mortgage according to the computer (despite having afforded it for over a year!) I've now had sole mortgage for 3 years and have never had any issues paying, even in difficult months so it can be done!
Taking in a lodger would certainly help your case too as that would be extra income - even better if you can get them in ASAP.
Good luck and I hope it all worlks out for you - I know how tough it is and you have my sympathy!
Posted on 28 June 2010 | Love 0 loves Report
24

spidermev posted
"If the bank says no to giving me the mortgage on my own and I can
persuade my partner to keep the house until the fixed deal ends but with
me paying the mortgage in full, is there anything I can have written
legally that basically says as long as I havent defaulted on payments
(caused any problems for him) he is not entitled to make me sell / to
any of the profits?"
Gemmma, I understand your situation as it hits very close to home but IF he is willing to do that for you, I think he should be entitled to something! If he would put his credit rating on the line and keep himself tied down to your mortgage, as he probably wouldn't be able to get another mortgage at the same time, surely he deserves something? Don't you think thats a little harsh??
Posted on 28 June 2010 | Love 0 loves Report
212

SoftwareBear posted
I'm just concerned.
What is the motivation here.
Do you want a property ... or do you want to avoid spending money on the mortgage penalty ?
Is the penalty more than the remaining mortgage payments (I suspect not currently).
If you want the property then continue with the transfer ... if it's just to avoid the penalty then jointly sell it asap because it's going to cost you more to avoid the penalty I think.
Posted on 29 June 2010 | Love 0 loves Report