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5th January 2017, 20:27:PM #1
House Buyout Advice Please
Hope this is in the right place, looking for some information if possible,
I split up with my ex-girlfriend 18 months ago and we had a mortgage together, we lost a lot of money with the recession so we had about 20k negative equity at the recession point (we didn't have it valued but just went by the house attached to our semi sale price at the time).
We paid 121k for the house when we bought it, paid the mortgage for seven years together and the balance was 104k when we split, the house was probably worth 100k-105k at the time we split up.
The house was a mess and needed a lot of work, rather than break even on a sale or lose money, I said I didn't mind staying and doing some work myself to try and get the value up a bit, I said I would need to get the value up and pay the mortgage off myself for a few years before I could probably get accepted for a mortgage on my own for the balance owed.
I said I would pay her back 6k over a set amount of years, which was kind of the money she had paid into the house (we were interest only for three years) but she would need to keep her name on the mortgage while I paid her off and sorted the house and my finances, which I thought was good for both of us, I got to keep the house and she got her money back.
So I typed up a letter that we both signed, the letter stated that the house had no equity but I was willing to pay her 6k for the house within a maximum of ten years but would aim to do this within 3-5 years provided that she kept her name on the mortgage whilst I was getting myself financially sorted for a mortgage and paying her off. It's been 18 months and I have paid £1400, made up of three labelled bank transfers to her. So i'm on target for the the 3-5 years that I had said I would try to do.
So..... she has had problems with debt and she is not the greatest with spending her own money, I know when we split she had a credit card (I don't think It was secured on the house, but i'm really not sure now) the balance was around 5-6k when we split, I know she went on holiday last year and I also know she doesn't earn that much money, we share our dog and the other day she had a new car (not brand new, but newer than the old) which she said she treated herself to for xmas.
My question is, where do i stand with all this and is there a way I can find out what is secured against the house in her name, I don't really want to paying her buy out payments if she has over 6k secured against the house, she is not the best with payments and has had repossessions before also.
Any advice on this would be greatly appreciated thanks as i really don't want to end up on the bad end of this, I have spent a lot of money on the house over the last 18 months and paid the mortgage on my own.
5th January 2017, 23:25:PM #2
Re: House Buyout Advice Please
Hi and welcome to LB.
To see what is secured against he house , check the land registry.
I vaguely recall that solicitors may have access to charges/restrictions that aren't visible on the public Land Registry system, so you might want to ask your solicitor to check
And then ask him to register a priority restriction to prevent other charges being registered
6th January 2017, 15:58:PM #3
Re: House Buyout Advice Please
I expect a lot will depend on the wording of that letter you both signed and the circumstances under which you signed it. Could she argue it was under pressure? Was it witnessed by an independent third party?
At the moment (going by what you've said) the mortgage is in joint names so you are both jointly and severally liable for the repayment. The lender doesn't care which of you pay it as long as it's paid. If things go wrong and they decide to repossess then they could chase either/both of you.
If you have a joint mortgage it's more than likely that both your names are on the deeds at Land Registry. Unless you've set up a Tenants in Common arrangement the property will be deemed to be owned 50/50%. A Tenants in Common situation is where you specify defined unequal shares such as 70/30%.
It seems everything is fine at the moment but your concern is your ex may be running up debts which could result in a Charging Order on the property. I don't think there is anything you can do to prevent that apart from remortgage and take her name off the Deeds (by consent).
As Des has said you can check Land Registry to see if any charges have already been obtained. Here's a link and it will cost you £3 for a downloaded PDF provided within seconds of your search > https://eservices.landregistry.gov.u...436.1483713967
Your other concern is that if that were to happen (a CO for your ex's debts) you don't want to find yourself in a position where you have paid her the agreed £6k only to find that there's £6k or more charged against the house so when it's sold or remortgaged that money will be deducted from the available equity.
Since the house is in joint names and the debt would be in your ex's sole name then the charge on the property would be a 'Restriction' not a full Charging Order so there should be no risk of an Order for Sale. This means that when the property is sold (or remortgaged) the sum owed under the CCJ would be paid out of the equity on completion, albeit only 50% of the equity would be at risk so if the sum owed is greater than that, the creditor can't take it from your 'half'.
I probably haven't allayed your fears, but I hope have explained what you need to fear.
Will you be in a position to remortgage soon? And/or find out whether you can set up a Tenants in Common deal retrospectively.
DiI work for Joanna Connolly Solicitors a firm which specializes in consumer credit. Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any advice I provide is without liability. If you are unsure please seek formal legal guidance or contact your local citizens advice bureau at https://www.citizensadvice.org.uk
6th January 2017, 16:30:PM #4
Re: House Buyout Advice Please
Thanks for the reply, much appreciated,
She wasn't under any pressure when she signed the letter, there was nobody else there but I made sure she was happy with it, and was more than happy to take the first payment.
Probably looking to finish paying her mid-late 2019 , I did drop her a quick text yesterday saying when I was hoping to finish by, and to check if she has any debt secured against the house as I did not any surprises when I came to remortgage.
She said that her car loan has her new address on the loan documentation (not sure what that means). I asked if she could just check her credit card for me just to be sure, no mail comes here for it, but again i'm not, really sure how unpaid credit cards work also. I think for the sake of £3 i will check the land registry as she hasn't got the greatest past history with debt, and telling the truth for that matter.
I'm not really sure how the application for the mortgage will work, as the market stands as of now (I know a lot could change), In 2.5-3 years I would be looking to have the value of the house up to 120k-130k and the balance around 90k, I earn a base salary of 35k and up to 12% bonus on top, possibly take a 5k deposit with me if that would help? I don't have much debt now (a few cards and next account all totalling 3k) but would be looking to be debt free by the time i apply, I haven't missed any mortgage payments etc. Are mortgage companies stricter for a single person who is borrowing close to three times their salary?
Many thanks for your help on this, really appreciated.
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