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Complicated Mortgage situation
Posted: Fri Mar 10, 2017 10:17 am
My partner and I have 2 children and we live in a house I originally bought back in the 90's with my ex-wife. After getting divorced and my new partner moving in, we bought out my ex-wifes share of the property, paying her Â£35,000, half of the equity. She has signed receipts for each payment and a final letter relinquishing all interest in the property. But on the mortage is still my name and my ex-wifes. I have had debt problems (most of which I am gradually sorting as best I can slowly) and will have a porr credit rating for sure, so if I had to get a new mortgage with my new partner then, if they would even let me have one, I think might be Â£700-800 which we couldn't afford, so we left the mortgage as it was as I am currently only paying a few hundred which I can manage. My issue is, how can I protect the proprty for my new partner and children should anything happen to me? And if anything happened to me and I have my other debts, how can I ensure she still has the house and doesn't lose it to pay the debts. Can I completely transfer it over into my new partners name? Or is the only way out of this to sell the house and we would probably have to rent, and again, depending on if they would even accomodate me with my current situation. Any advice would be gratefully received, thanks in advance.
Posted: Fri Mar 10, 2017 11:11 pm
Hi Happydad-firstly I would ask your current lender whether they will remove your ex wife and add on your new partner. Although you have bad credit, you are already on the mortgage, so if you are bettering their position-ie. if your current partner earns a similar amount or more than your ex wife and has good credit herself, it could be a go-er. I am wondering though why you expect the monthly payments to increase on the back of this? Are you on a payment arrangement?
In terms of how the property would be split if something happened to you- it depends whether the deeds are 'joint tenants' or 'tenants in common'. If the former I'm afraid your ex wife would take the property in her name. If the latter, your share of the property would be transferred to whoever is specified in your will (or in the absence of a will you're wife if your married, your children if not)
Posted: Sat Mar 11, 2017 8:21 am
If you want to protect your current family invest in some life and or sickness insurance.
Posted: Sat Mar 11, 2017 6:45 pm
Thank you so much for replying. I have to admit I'm not great with this kind of stuff and sought a lot of help from my Dad in the past, but he now has quite bad dementia, so I can get any help that way. My new partner and I have been together 10 years now and I did go into the mortgage company to sound them out back at the start and they said I couldn't change names over but it would need a new mortgage. My worry is that with a poor credit rating I would surely be charged a higher amount/rate. I had a low fixed rate I believe and am paying Â£200 per month, with Â£80k still outstanding. Most people I know these days seem to be paying Â£600-800 as standard and there is no way we could afford that. Also, if I alert the mortgage company to my situation, can they force me to change the names etc on the mortgage? My current partner earns similar but is very good with her money, but has never had a loan, credit card or anything else, so she would have no credit rating herself having never used any. Another issue is that all my paperwork was always stored at my parents, but we found out that in the early stages of my Dad's dementia, he started disposing of stuff around the house, including my documentation, so I have little to go on. It's a bit of a worry, but whilst I am paying my mortgage OK I've been leaving it as it is so the kids and us all have a roof over our heads. Presumable selling the house is my best way to get my ex off the deeds and safeguard my new partner/childrens future? Sorry for the vagueness but not completely sure of my own situiation, as crazy as that sounds.
Posted: Sun Mar 12, 2017 12:24 pm
Would selling the property enable you to resolve your own financial issues once and for all? Whilst renting isn't ideal. The option would at least give you a clean slate and a platform to move forward from.