Ex-partner is wanting to sell the house.

[glenimp617]

I have to say, the current rules are bonkers

"So-called 'mortgage prisoners' are people who've been told they 'can't afford' to remortgage, even though they are keeping up with their payments and want to switch to a CHEAPER rate."

When a person is paying £900 a month yet gets told they can't afford to save £300 on a cheaper deal, you know the system is broken

 

[d_brennen]

I have to say, the current rules are bonkers

"So-called 'mortgage prisoners' are people who've been told they 'can't afford' to remortgage, even though they are keeping up with their payments and want to switch to a CHEAPER rate."

When a person is paying £900 a month yet gets told they can't afford to save £300 on a cheaper deal, you know the system is broken

The bank get to keep the asset AND make money on the loan. They are out for profit, "affordability" is an excuse to make more money and protect their asset from pesky customers whittling down the mortgage and actually being free of them

 

[Skiddley]

These matters really should be cleared up at the time of the split. I know some other people who are in this situation (ex's on mortgages), and find it bonkers that your partner would allow it to continue given that it's the roof over her, and her children's heads. It's fairly irresponsible.

I would meet with the ex to discuss. Offering from the equity that was paid as part of her £10.5K contributions (not the interest!), to the equity offset by the negative equity at the time of the split (assuming that she was part of the original purchasing decision). In my mind she would have no claim to capital gains post split - and this should have been clarified at the time of the split - sounds like you bottled it. Any payment to her would be conditional on her proceeding with a ToE arrangement. You will need to remortgage, and you will need to involve two seperate solicitors to clear this up.

I would begin with managing her expectations.

 

[The_Abyss]

The bank get to keep the asset AND make money on the loan. They are out for profit, "affordability" is an excuse to make more money and protect their asset from pesky customers whittling down the mortgage and actually being free of them

No, affordability to ensure that there's responsible lending and people don't end up like the OP has, being able to borrow 120% equity on the house.

As others have rightly pointed out though, the current system does have flaws and there's no market for some borrowers who are stuck. That's getting sorted. But nobody wants to get back to the days of secured lending on an asset worth less than the loan, or lending 10 times salary to self-employed people on the basis of two months of trading etc. It isn't good for people and it isn't healthy for the housing market either.

 

[d_brennen]

No, affordability to ensure that there's responsible lending and people don't end up like the OP has, being able to borrow 120% equity on the house.

I wouldn't call letting someone pay interest only for 15 responsible. Doing that en mass it's priming a financial timebomb

 

[Minstadave]

I wouldn't call letting someone pay interest only for 15 responsible. Doing that en mass it's priming a financial timebomb

It's pretty safe for the banks, they take the interest only payments and just repossess the house if the money doesn't keep coming in.

 

[d_brennen]

It's pretty safe for the banks, they take the interest only payments and just repossess the house if the money doesn't keep coming in.

For the customer I mean. The banks win in a huge bust too

 

[touch]

It's pretty safe for the banks, they take the interest only payments and just repossess the house if the money doesn't keep coming in.

That's only safe if house prices go up.

 

[d_brennen]

That's only safe if house prices go up.

Not really. They'll have had 25 years worth of payments that cover the money lent AND a depreciated asset to sell. OP has nothing to show for it

 

[The_Abyss]

I wouldn't call letting someone pay interest only for 15 responsible. Doing that en mass it's priming a financial timebomb

It is only irresponsible if the individual has made no provision to ensure that they have a means to repay the capital at the end of the mortgage term. They will be reminded about this repeatedly during the term. This money was originally lent on repayment basis.

Responsibility works both ways. I know that the regulators of financial services are doing their utmost to have a slow creep towards removing all personal responsibility from individuals, but we're not there yet!

 

[The_Abyss]

Not really. They'll have had 25 years worth of payments that cover the money lent AND a depreciated asset to sell. OP has nothing to show for it

Yes he does. He's got a house that he's been using to house his family in for all these years. He's been living in it, and he's still living in it. Does he own it? No, because he hasn't paid enough. If I lease a £30,000 car for 3 years and pay peanuts to do so, guess what - I won't own the car at the end of the 3 years either but I have paid to use the car!

 

[Deleted member 651465]

For the last 10-12 years I have been living in the house, myself and my ex purchased with a mortgage. We are both still on the mortgage.

Any reason why you never chose to remove her? Does your wife like it that your ex is on the mortgage?

The fact that she's listed on there only really hurts you. Get her taken off ASAP and go speak to a solicitor.

 

[Kenai]

Any reason why you never chose to remove her? Does your wife like it that your ex is on the mortgage?

The fact that she's listed on there only really hurts you. Get her taken off ASAP and go speak to a solicitor.

He explained earlier that the mortgage provider won't let him as they don't deem him capable of paying on his own.

 

[~Divine~Wind~]

Right I think I've caught up..

So Ex wants to sell
You Don't want to / You can't Remortage on your own
You then mention that your current wife works full time?

I Can't see this being mentioned before but have you looked at putting a Mortgage application in under both of your names with both of your incomes?
Rather than sit wit the current provider and length of mortgage this should allow you to reset to a 25 year or so surely?

Your Ex has let you live there without question, she's even covered your own mortgage payments a couple of times.
Is she aware that the mortgage has been swapped to a interest only one?

Seems to me like she's been extremely amicable and simply didn't want to lose money back when you split up, really does seem wrong to have her locked on a mortgage that she has no access or interest in the property. Other than the above suggestion I think like others the only option is going to be to sell now, rather than splooging a loada of cash at the house for years to come only to end up having it back to the bank if you've not setup any way of clearing the owed amount once the mortgage ends.

 

[AndyT]

I think I have a firm grasp on the situation now - and in my opinion there is only one reasonable course of action, and that is to sell.

You know that you cannot get a mortgage for the property completely in your name, which rules out the option of transferring the mortgage to you.

Your ex may be able to get the property transferred into her name, but this would then become her property, what would you expect to happen in this situation? Do you expect to continue to live there and pay rent? If so surely this becomes a buy to let mortgage and she'll incur a higher interest rate. She would effectively become your landlord, she would be liable for repair / upkeep on the property, and I would expect her to be able to set the rent at a fair rate, which may well be considerably higher than you are paying at the minute.

Or she gets the property transferred into her name, and then assumes residency in the property, meaning you're looking for a new place to live.

The only fair and equitable solution is to sell the property, other avenues are closed off due to your financial situation or would be unfavorable from the other parties point of view.

I know its a **** situation, but you need to face facts that realistically you cannot afford this house at the moment. Your interest only mortgage is a ticking time bomb, fighting this out through the courts is going to be a long and stressful process that you do not need hanging over your head with a young family, and it would be unfair to your ex and her ability to move on with her life to expect the current situation to continue in perpetuity.

Selling a house is not instant, there would be plenty of time to get your affairs in order and get the support you need (social housing, etc) - its not perfect and I'm sorry that you've ended up here but it seems the only reasonable solution.

Post of the day! Listen to this chap, OP. You need to get yourself away from the debt attributed to this house, it's a millstone around everybody's neck. All you have is a debt, you are effectively renting. Nobody actually owns anything in this story. It will be a painful upheaval in the short term to move or downsize, but I don't see any other sensible option. Also, interest rates will eventually rise again, so at some point in the future, you'll be paying the bank more "rent" on your mortgage.

The only alternative might be if you apply for a joint mortgage with your current partner, if you can somehow cobble together 10-15% of the value of the property as a deposit.

 

[melmac]

Sell the house. Put it up for sale tomorrow, don't wait. The current situation is just a lodestone dragging you, your family and your ex down. And it's just going to get heavier and heavier. The longer you leave it the worse it's going to get. Stop hoping for a change of circumstances to save you.

Nobody will be happy until the house is out of your lives.

Leaving things as they are or going to court or trying to scrap enough together to remortgage are all terrible ideas.

It will be hard, the best solution usually is the most difficult, but it will be worth it to be free of that debt.

 

[balls]

It sounds like the interest rate your paying is quite huge.
A very left field approach may be to speak to private financiers/investors? I've never used one for anything like this, but there may be one that would bite