Posted on 18 May 2010 by Siobhan Quinn
I have recently split from my partner and we have a joint mortgage together on a house we bought less than a year ago. He wants out as soon as possible so he can move into rented. The house has not increased in value since we bought it last year and if we sell now with the penalty of coming out of the mortgage early and estate agents and solicitors fees we stand to lose money. We are getting the house ready to sell at the moment. By the time it is ready to sell I will be able to afford the mortgage repayments on my own and have been offered the money by friends to pay him back his deposit and effectively buy him out. (He will get less than his deposit back if we sell at what we paid for it once all the fees are taken into consideration).
I am worried though that the mortgage lenders will not agree to me taking the mortgage on on my own. Based on my salary I am eligible for a mortgage of around Â£10000 less than I need according to the online mortgage calulators but I have very little outgoings bar the mortgage (which is repayment not interest only and I can afford to keep it at that) and can easily cover the mortgage and all bills while still having over Â£600 a month for frivolous stuff like going out. Is it likely there is any way they would accept me as sole owner or would I maybe need to look at paying the mortgage on my own, keeping my ex partners name on the property and approaching them again in a year when I have proved I have been able to make the payments on my own. If I did the latter would my ex be entitled to more than his deposit if in that year the house has increased in value?
I really can't afford to sell as I paid most of the deposit when we bought the house and would stand to lose a lot more money than my ex. He has too many outgoings to be able to afford the mortgage on his own and is happy for me to try and get it on my own rather than us sell and both lose out.
You don't say whether or not you have spoken to your existing Lender? When considering transferring the title of the property and changing the names on the mortgage they need to be your first port of call. When you do go to see them, take evidence of your income and at least the last 3 months bank statements so that you can work out your income and expenditure. It may well be that you do not fit their standard criteria, but with the information you are able to provide an underwriter would still be willing to agree to removing your ex partner.
The Lenders normally charge a small fee for considering a 'Transfer subject to mortgage' and you will also need to instruct solicitors to deal with all the legal paperwork for both you and the Lender.
If your existing Lender does not agree to the transfer, you will need to consider whether or not a remortgage is practical. As you rightly state the early repayment charges on your existing mortgage may make this too expensive to consider now and you will be left in the situation you describe with you paying the mortgage and your ex partner being able to claim any increase his share between now and when the property is sold.
I recommend that you see your Lender and seek independent legal advice about how best to protect your interests should they not agree to the transfer.
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