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Mortgage Problem - Is there a solution

  • bobbeckit
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27 Jun 12 #339424 by bobbeckit
Topic started by bobbeckit
Hi All,

I am seeing my solicitor today and was preparing some information to take with me, and it occurred to me that I think I have overlooked a big problem.

For those of you that don''t know, I have 4 properties in my name and I am the only party listed on the mortgage. The total equity is in the region of £180K.

My wife and I have agreed that we would like a fair split on the assets, and a Clean Break, but I am now wondering if this is at all possible.

I am happy to sign over the title of the FMH to my wife, but as she does not work she will not be able to get a mortgage. I am thinking that this wouldn’t be so complicated if she were already on the mortgage, because in time she could take me off it.

I think this is why her solicitor has suggested liquidating all the properties and buying her somewhere mortgage free, and giving me about £20 to £30K to get a Clean Break.

Ideally I would like to buy somewhere else and move on, but I can''t see that I will be able to do this unless I can get off the mortgage of the FMH, because I only earn £32K which is not enough to cover 2 mortgages. Is my understanding of this correct.

Would it make things easier if we remortgaged later this year, and included my wife on the mortgage? Would this reduce my liability in the banks eyes.

Is it possible for me to stay on the mortgage, and rent somewhere else, and sign the full title of the property over to my wife. At least this way I can stay on the property ladder with the rentals, my wife stays in the FMH, and the bank is happy that I am on the mortgage.

What I desperately want to avoid is having to liquidate the other 3 properties and use all of the capital on the FMH and loose the title.

Does anyone have any suggestions that I could raise with my solicitor this afternoon, on how we could approach this.

Ideally we would like to part financially as soon as possible without the use of any mesher agreements etc, but we would also like me to have enough money to buy my own place.

Any suggestions would be welcome.

Bob

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27 Jun 12 #339446 by cookie2
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bobbeckit wrote:

Would it make things easier if we remortgaged later this year, and included my wife on the mortgage? Would this reduce my liability in the banks eyes.

No. When you gte a mortgage in joint names, you are "jointly and severally" responsible for paying it. This means you are BOTH responsible for paying ALL of it. So you would be just as liable (100%), whether her name is on it or not.

Is it possible for me to stay on the mortgage, and rent somewhere else, and sign the full title of the property over to my wife.

Yes, this is in fact very common.

But in fact I think your wife will want a lump sum payment as well. After all she would be getting a house worth £80k, whereas you would be getting 3 houses worth £100k. I should think she would want (at a MINIMUM) for this to be equalized, if not more. So you''d be looking at a payment of £10-20k AT LEAST. How you raise this lump sum would be up to you (maybe sell 1 property, extend one of the mortgages, beg/borrow/steal from relatives?).

There simply is not enough money for everything you''re asking. You want her to have the FMH, for you to keep the 3 rentals, AND for you to have enough left over to buy another place for yourself? Sorry, there is simply not enough to spread it so thin. I think your best option is as above, you give her the FMH and a lump sum (to be negotiated), you get to keep the rentals and do with them as you please. I very much doubt you''ll get a better outcome than that.

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