Mortgage advice

beatlesfan3333 · 11-08-2014 2:06pm #1

My house is in negative equity and I’m looking for some advice. I pay the mortgage on my own. My ex-partner doesn’t live there and she can’t afford to contribute towards the mortgage at all. She doesn’t have a full time job and she is renting with a friend at the moment. I was thinking about renting it out and moving closer to my job. I don’t want to live there anymore but I’m stuck because she won’t live in the house and I’m the only one who can pay the mortgage. I have a few questions about renting and mortgages in general:

1. Would I lose my tracker mortgage if I rent it out?
2. What is the likelihood of the bank allowing one of us to sign the house over to the other person? What does this entail?
3. If I decided to walk away from the house and stop paying the mortgage, what would happen? I wouldn’t mind if the bank took the house but could I be in trouble with the law and would I be fined?

I know it may come across that I want to run away from my responsibilities but I don’t want to live there anymore for various reasons and it seems like I am stuck there for the rest of my life. Making the decision to stop paying the mortgage is a last resort so I’m just wondering what would happen if I did it. Any advice on this would be really appreciated, thanks!

Michael D Not Higgins · 11-08-2014 3:06pm

1. Yes, you would lose the tracker mortgage. Where is the house? Is there a decent rental market in your area? You might consider the rent a room scheme which is tax free up to 10,000 (including all bills and rent paid).
2. Can't help here but someone else should know.
3. You'd still owe the debt. Short of becoming bankrupt there's no mechanism to hand back the house to the bank with no repercussions.

unattendedbag · 11-08-2014 3:46pm

How much negative equity? Can you keep living there or rent out until you're out of negative equity? There's no point defaulting on a mortgage if you are only a couple of years from coming out of NE. Speak to a solicitor about getting your ex partner to forfeit any interest in the property. She could probably still claim her share of the profit down the road if you do end up selling.

Eldarion · 11-08-2014 4:08pm

Honestly if you can hold out another year or so the rising house prices could bring you out of NE earlier than you think. Easy choice to sell then and move on clean and clear.

Your tracker is more valuable than you think also. Banks are offering people haircuts/principle reductions to get them to move from tracker to variable. You could negotiate a figure with the bank for you to give up the tracker, just make sure this figure is enough to bring you out of NE then you're in the clear to sell.

Try to nail the selling price right on the debt amount though otherwise any profit you make from the sale will have to be split 50-50 with your non-contributing ex-partner.

beatlesfan3333 · 11-08-2014 4:25pm

Thanks for the advice guys, very helpful. It's a house in Kildare and I'm not sure the demand for renting is very high. I haven't looked into it that much yet. Ideally it would suit me better if the ex partner signed her share of the house over to me but I don't think she is willing to do that. She feels she is entitled to half of the house if it sells, even though she cannot contribute towards the mortgage and hasn't for the past 12 months or so. It would seem that I am destined to continue paying the mortgage on my own until I can rent it out or sell it, which seems very unfair on me. There is no way for me to force her to sign her share of the house over to me is there?

Michael D Not Higgins · 11-08-2014 4:28pm

beatlesfan3333 wrote: »

Thanks for the advice guys, very helpful. It's a house in Kildare and I'm not sure the demand for renting is very high. I haven't looked into it that much yet. Ideally it would suit me better if the ex partner signed her share of the house over to me but I don't think she is willing to do that. She feels she is entitled to half of the house if it sells, even though she cannot contribute towards the mortgage and hasn't for the past 12 months or so. It would seem that I am destined to continue paying the mortgage on my own until I can rent it out or sell it, which seems very unfair on me. There is no way for me to force her to sign her share of the house over to me is there?

I'd speak to a solicitor. I can't speak for the law but I wouldn't think it's fair to expect an entitlement to half an asset you haven't been contributing to.

beatlesfan3333 · 11-08-2014 4:35pm

I think seeing a solicitor is probably the best thing to do then, thanks. I'd sign it over to her in a heartbeat so I'm done with the thing but I don't think she'll take it on as a responsibility. It suits her to have me living there and paying the entire mortgage. The thoughts of renting it out overwhelm me. I've looked into a bit and it all seems very complicated. I suppose I'll see a solicitor anyway and see what my options are. Thanks for the help

Eldarion · 11-08-2014 4:45pm

Michael D Not Higgins wrote: »

I'd speak to a solicitor. I can't speak for the law but I wouldn't think it's fair to expect an entitlement to half an asset you haven't been contributing to.

She is fully entitled to half. It's a joke but it's the law. There are worse stories out there of partners who weren't even named on the mortgage claiming half the asset because they got mail delivered to the address for more than a year. Not a cent paid towards its value.

Michael D Not Higgins · 11-08-2014 4:50pm

Eldarion wrote: »

She is fully entitled to half. It's a joke but it's the law. There's worse stories out there of partners who weren't even named on the mortgage claiming half the asset because they got mail delivered to the address for more than a year. Not a cent paid towards it's value.

Wow, didn't know that. I presume they'd have to be civil partners or married, yes? Or is there a case of unmarried people having the same issue?

beatlesfan3333 · 11-08-2014 4:54pm

I didn't know that either. I assumed because she wasn't paying the mortgage I'd have some leverage in getting her name off it. I'm interested to know the exact repercussions of not paying the mortgage. I don't want to live there anymore. It's too far from my job and living there is hindering my ability to move on with my live since the break up. It just doesn't seem fair for me to be stuck there paying it all while she moves on with her life with no responsibilities to the house. I'll speak to a solicitor and find out the exact consequences of not paying the mortgage.

Stheno · 11-08-2014 4:54pm

Michael D Not Higgins wrote: »

Wow, didn't know that. I presume they'd have to be civil partners or married, yes? Or is there a case of unmarried people having the same issue?

Cohabiting couples who have lived together for five years have a redress scheme (2 years if they have children)

beatlesfan3333 · 11-08-2014 5:00pm

I read the link, thanks. Does that mean that if I lived with my ex partner for over 5 years and she can prove that she is financially unstable now, she could now seek some of my earnings?? I was helping her out a lot before we split, she lost her job about 6 months before the break up and I was sustaining the bills and mortgage.

Stheno · 11-08-2014 5:01pm

beatlesfan3333 wrote: »

I read the link, thanks. Does that mean that if I lived with my ex partner for over 5 years and she can prove that she is financially unstable now, she could now seek some of my earnings?? I was helping her out a lot before we split, she lost her job about 6 months before the break up and I was sustaining the bills and mortgage.

edited to remove potential legal advice

Michael D Not Higgins · 11-08-2014 5:02pm

beatlesfan3333 wrote: »

I read the link, thanks. Does that mean that if I lived with my ex partner for over 5 years and she can prove that she is financially unstable now, she could now seek some of my earnings?? I was helping her out a lot before we split, she lost her job about 6 months before the break up and I was sustaining the bills and mortgage.

I think we've reached the natural conclusion of the advice we can offer. Legal advice is against the rules of boards. You'll have to speak to your solicitor.

beatlesfan3333 · 11-08-2014 5:03pm

Oh okay, apologies. Thanks

Uriel. · 11-08-2014 5:23pm

Eldarion wrote: »

She is fully entitled to half. It's a joke but it's the law. There are worse stories out there of partners who weren't even named on the mortgage claiming half the asset because they got mail delivered to the address for more than a year. Not a cent paid towards its value.

Some well intentioned advice on here OP but not all of it fully correct.

Firstly, you may not lose your tracker rate if you rent out the house. You should consult your mortgage contract to see the terms and conditions.

She may not be entitled to half the house at all. Individual circumstances will apply and it may not be a 50/50 split having regard for the contributions made by each party.

OP I would strongly suggest you take legal advice on this. Unfortunately unless you protect your interests, the law may well see the matter as 50-50 and it is your credit rating that will be destroyed if there is a default.

MouseTail · 11-08-2014 6:41pm

We are not talking about whether someone is entitled to half an asset here, rather is someone liable for half the debt on a negative equity mortgage. And they are, in fact OP and the ex are jointly and severally liable for 100% of the debt.

Uriel. · 11-08-2014 7:02pm

MouseTail wrote: »

We are not talking about whether someone is entitled to half an asset here, rather is someone liable for half the debt on a negative equity mortgage. And they are, in fact OP and the ex are jointly and severally liable for 100% of the debt.

Yes they are and that's precisely why he should be taking legal advice immediately, especially when she expresses expectations of maintaining her equity on the house whilst not contributing

Mortgage advice

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