Posted on 15 May 2010 by Mike Osbourne
Hi, I jointly own 2 properties with my ex partner from whom I split with in Sept 08, she wanted to stay in the main residence even though I suggested letting it, the other property is already a buy to let. We then came up with the idea of her having the house & myself having the flat, which the mortgage lender would not allow.
We would like to move on, but are now stumped as property values have fallen & I personally would like to hold onto the properties but not sure what to do. If I decided to buy her out and change mortgages to my name only would I have to re-apply or could I make her an offer and use a guarantor or maybe have someone else's name on the mortgages, or maybe just keep it as it is for the foreseeable future, what would you advise?
If you have decided to keep the properties and transfer the ownership to your sole name, you will have to get your mortgage Lender's permission to do this. They will normally want a simple application form completed and then make an assessment of your income and expenditure to make sure the mortgages are affordable.
There are several complications to this process, you will need to have the properties valued and agree with you ex partner how much you will need to pay for their share. More than likely you will want to increase the amount of your mortgage to cover this sum and the Lender will need to take this into account in their assessment.
If our Lender decides that they are not willing to give consent to the transfer, you will then have to ask them whether a suitable guarantor would change matters. Alternatively, depending on the rental income the flat commands you may be able to spread the increased borrowing between the two properties or consider remortgaging to another Lender who would be happy that you can afford the debt on your own.
Whether or not this is worth pursuing at the moment, depends on your personal circumstances and whether or not you think there is likely to be a substantial change in the value of the properties in relation to your income in the future.
I recommend that you speak to your existing mortgage Lender first and then if necessary to an independent mortgage adviser who can look at suitable alternatives for you.
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