transferring joint mortgage to one name

purple17

Hi
My ex and myself bought a house 3 years ago under joint mortgage from ptsb.
Since then we've had a baby and relationship has broken down 2 years ago. He moved out and i was left with mortgage as he refused to pay unless he was living there.
Since then ive been on interest only mortgage, took some payment holidays etc until we came of the fixed rate - all paying by myself out of my own bank account + informed bank of this. Since mortgage switched to variable in Oct 2009 ive been paying full amount of mortage myself (capital + interest).
Ive made ptsb aware that im paying on myown, ex wants nothing to do with house and requested to take it into my own name. They've refused saying on paper i cant afford mortgage by myself. I was advised to pay it for a year by myself to prove i can afford repayments and ive been doing that a year now.

Just checking is it a long process involving solicitors to get house transferred to my name?
Will bank still refuse to allow me to take on mortgage myself as earnings not sufficient?
What if my ex refuses to sign it over to me?
I want to stay here as dont want to uproot mychild, close to my family and ive maintained + paid for house so far.
What if he's looking to be bought out - i cant afford to give him anything - he paid half the mortgage for a year but i since paid towards repairs, maintenance and furnishings etc.
Is my only option then to sell and take on €100k negative equity (between both of us of course).

dotsman

purple17 wrote: »

Hi
My ex and myself bought a house 3 years ago under joint mortgage from ptsb.
Since then we've had a baby and relationship has broken down 2 years ago. He moved out and i was left with mortgage as he refused to pay unless he was living there.
Since then ive been on interest only mortgage, took some payment holidays etc until we came of the fixed rate - all paying by myself out of my own bank account + informed bank of this. Since mortgage switched to variable in Oct 2009 ive been paying full amount of mortage myself (capital + interest).
Ive made ptsb aware that im paying on myown, ex wants nothing to do with house and requested to take it into my own name. They've refused saying on paper i cant afford mortgage by myself. I was advised to pay it for a year by myself to prove i can afford repayments and ive been doing that a year now.

Just checking is it a long process involving solicitors to get house transferred to my name?
Will bank still refuse to allow me to take on mortgage myself as earnings not sufficient?
What if my ex refuses to sign it over to me?
I want to stay here as dont want to uproot mychild, close to my family and ive maintained + paid for house so far.
What if he's looking to be bought out - i cant afford to give him anything - he paid half the mortgage for a year but i since paid towards repairs, maintenance and furnishings etc.
Is my only option then to sell and take on €100k negative equity (between both of us of course).

Did you have any legal agreement in place as to what to do with the house in the event of circumstances such as this?
If not, it is a very difficult and complicated process.

Basically, the bank are not going to take him off the mortgage as that means they have one less person to chase in the event that you get into arrears. For him to come off, it is likely that you are going to have to wait until the LTV is much lower and your income can match the repayments comfortably.

At this stage you definitely need to seek legal advise. He is equally responsible for paying the mortgage as you are (also legally entitled to live there just as much as you are!). If he/ptsb fight it, then yes, it could become a very long, drawn out affair. If, however, you are all able to come to a binding agreement, then it may be possible to achieve what you want.

P.S. If, as I understand, you are in negative equity, then you won't have to "buy him out". In fact, it would be the other way around, whereby he pays you to remove him from the mortgage (as you are relieving him of a debt that exceeds the price of the underlying asset)

purple17

thanks that's all very useful. Basically banks only option is to put in my name or else ill go down road of voluntary repossession as im not continuing to pay mortgage with ex's name on house also.

eagle_i

Below is a copy of my post answering similar query to yours, you see the full post here.

Dotsman is correct above, however, as you will see below I've gone bit further in regard to the tax exposure, your mail does not state whether you are married to your ex? If you are married the tax element of my post does not apply in that case, as the passing of an asset from spouse to spouse does not carry a tax liability.

You really need professional advice from legal, financial and tax advisers.

To have your ex removed from the mortgage your income needs to be sufficient to carry the mortgage and pass the stress test. Which from your previous post, the bank has already completed and refused as your income does not meet these criteria. To complicate things you will also need to have the ex’s name removed from the deeds of the property, otherwise the bank will not approve a mortgage on the property in your name, as he still holds an interest in the property. The easiest way for this to happen is if your ex agrees to sign the house over to you, otherwise you are looking at a costly court battle to force the removal of your ex from the deeds of the property.

Now to complicate things further, the tax man will want his pound of flesh. You are looking at stamp duty on the ex’s portion of the house value (negative equity or not, you are effectively buying him out of his portion) and also stamp duty on the mortgage itself, cause you are effective taking out a new mortgage.

Also, roll back to when you purchased the house, did you put up more money for the deposit and/or did you pay more towards the mortgage repayments while you were together (visa versa)? If yes, now you and your ex are looking at a gift tax liability. Essentially by paying more toward the deposit or toward the mortgage repayments you are giving a gift to your ex (visa versa) each and every time you’re making a repayment on his behalf. I’m not sure how active the revenue is in pursuing these taxes, but given the state of the tax returns I think they are looking at every avenue to squeeze blood from a stone..... any stone!

I’m sorry if this is frightening you but these are the consequences of a break-up especially where you are not married. Where a married couple break-up it is a lot simpler as taxes (stamp duty/gift or otherwise) do not become an issue. To be honest you might as well be married when purchasing a house, as you are married in a financial sense, but without the tax exemptions of a married couple.

purple17

Hi
No not married. I wouldnt have a penny to pay to tax man for gift tax or the like what with having a child to pay for also.
It was a 100% mortgage and we both paid same repayments for first year. Ive been living in house and repaying mortgage on my own for past 2 years (Paying capital + interest for last year)
Also considering my mortgage repayments are approx €100pm less than if i was to rent.
Im going to seek legal advice and book appointment with ptsb to go over my options again. Thanks

eagle_i

I’d hold off meeting with the PTSB for the moment, until you have full understanding of the legal aspect of the situation.

PTSB are not going to be able to do any more for you, they already indicated that nothing can be done as your income does not meet the minimum criteria to solely take over the mortgage. I get what you are saying about the rent versus the mortgage repayment, but unfortunately while a track record of meeting the repayments is good it is not the only deciding factor – if the income does not meet the minimum criteria and pass stress tests then there is very little the mortgage company can do for you. An alternative might be if a parent(s) is(are) willing and able to go guarantor on the mortgage with you, it might get a more favourable view from the PTSB.

First off get the legal advice and if possible get written agreement (through your legal advisers) from your ex that he is willing to sign over the house to you. As dotsman said above you are releasing him from a debt with a negative equity exposure, whether some form of compensation can be enforced, let alone be negotiated is down to your legal advisers.

One final note, keep a diary of all communications with your ex or any other related person, time/date/place of every telephone/face to face conversation, note of the conversation content, any verbal agreements/disagreements and a note of anyone who was present during the conversation. Also keep copies emails, facebook/twitter messages etc.., you never know when or if at all you may rely on this information to back up any disagreement/negotiating terms. Perhaps this sounds over the top and you may view it as a bit cold and calculating, but remember ultimately you trying to do what is best for you and your child.