House in Negative Equity - Second Mortgage?

hotelaccounts

Hi All,

Our house is in negative equity. Mortgage joint between me & my ex husband. His mother is gifting him a lump sum. He will still need a small mortgage in just his name to buy a property. He wants me to sign away any right to this new property. We have 2 yound kids so therefore I am staying in family home with children & we are continuing to pay the mortgage on this house.

Will the bank lend him a second mortgage free & clear of the first mortgage? Or will the 2 properties have to be cross referenced/linked? It has been suggested to me that no bank will allow this as he could then chose to pay off the small mortgage on property no 2 while perhaps let property no 1 go into arrears or be foreclosed if he got into financial difficulty.

Anyone with experience in this area I would appreciate advice as he is pushing for me to sign something asap.

Thanks.

killers1

hotelaccounts wrote: »

Hi All,

Our house is in negative equity. Mortgage joint between me & my ex husband. His mother is gifting him a lump sum. He will still need a small mortgage in just his name to buy a property. He wants me to sign away any right to this new property. We have 2 yound kids so therefore I am staying in family home with children & we are continuing to pay the mortgage on this house.

Will the bank lend him a second mortgage free & clear of the first mortgage? Or will the 2 properties have to be cross referenced/linked? It has been suggested to me that no bank will allow this as he could then chose to pay off the small mortgage on property no 2 while perhaps let property no 1 go into arrears or be foreclosed if he got into financial difficulty.

Anyone with experience in this area I would appreciate advice as he is pushing for me to sign something asap.

Thanks.

I'd recommend you talk to your solicitor first about the consequences of what he is proposing to do irrespective of whether or not he can/can't get mortgage finance.

phormium

As already advised you really must speak to a solicitor.

However regarding him getting a second mortgage, I don't see any reason assuming he qualifies based on income/lending criteria with the existing repayments and any maintenance etc why the new house would be cross secured or linked to the existing one and I would imagine he would go to a different bank for the second mortgage to avoid any connection between the two.

Usually cross securing like that was used in reverse, the existing property would have equity and would be used a security for the second one being purchased which was probably borrowed up to the hilt. This is actually the opposite, there is no advantage in the bank giving him the new mortgage cross securing with the old mortgage as there is no equity in the property. The bank with the old mortgage might well like to add the new house, with it's lower borrowings, to the old mortgage as security but as you have separated and both mortgages are not joint this would be a non runner for both of you if it was suggested.

handlemaster

I can see his need to get you to sign no interest in his new home. I would have taught with the separation ( if you are legally separated) that this wouldn't occur anyway. Solicitor is the only way forward here.

BuffyBot

Please go see a properly qualified person, not people on an internet message board, for this one