Changing mortgage from joint to sole

BabsieBoo · 10-11-2021 5:16pm #1

Hi there, I will try to keep this short.

Mortgage is in joint name (ex-husband) marriage broke down and ex moved out and stopped paying.

We want to move the mortgage solely to me.

However, valuation of the property came back for less than outstanding mortgage (not surprised as it was bought before the crash in '08).

Is this going to be an issue?

My salary is way over 3.5x of outstanding mortgage.

Thanks,

Barbara

coylemj · 10-11-2021 5:38pm

It depends on how your lending institution is going to handle this. If they view it as a new mortgage, you may end up paying a lot more in interest because the loan to value (LTV) will be >100%. Have they indicated that this will be considered as a new mortgage or will they allow you to contunue under the terms and conditions of the old loan?

While I can understand that you want to make a 'clean break', doing nothing may be an option worth considering.

BabsieBoo · 10-11-2021 5:46pm

https://www.boards.ie/discussion/comment/118147121#Comment_118147121

The bank were very vague - they basically just told me to fill everything in and send it in and they would evaluate.

Doing nothing is not an option as I've a family of my own now and if something was to happen to me I find it incredibly unfair the house would go to someone who hasn't contributed to it in 10 years...

Think I will try to call PTSB tomorrow and see if I can find someone to discuss it with.

A2LUE42 · 10-11-2021 5:48pm

You will need to involve your solicitor to do this and it may be considered to be the same mortgage and not a new one. It all depends on the numbers. Your Ex will also have to agree to relinquish his ownership of the property, not just be removed from the mortgage.

BronsonTB · 10-11-2021 5:49pm

What bank are you with? Tracker/fixed or variable mortgage? Did you you approach them for a neg equity transfer application? (First option)

Secondly, Are you able to get a mortgage in your own name to cover existing mortgage payments?

You may need to both pay into the mortgage to bring it down to a level that the bank will allow you become the sole holder.

Alternatively you may have to sell & both carry the outstanding balance after a sale to any new mortgage.

Again a lot of this depends on your existing bank & your repayment history & the sums involved.

A bank won't do you any favors & won't be looking at this from your perspective.

They will want to be able to secure the mortgage against both parties as long as possible. Him no longer paying won't matter to them.

Are you & ex on talking terms & being reasonable with each other at the moment? (This really matters when it comes to signing forms etc)

I've been through this & won't be easy but good luck with it all.

seamus · 10-11-2021 5:54pm

It's worth looking into. Probably your main sticking point is going to be the negative equity.

In effect you're asking for a 100%+ mortgage. They're not illegal, but very very hard to come by.

The bank may ask you to make a cash contribution against the mortgage to bring it down under 100%. This could be achieved by way of an unsecured loan. Realistically your ex should pay half of this, but I'm guessing that's unlikely to be a possibility.

The other issue is the deeds. You will have to take your ex off the deeds, otherwise he still has a legal interest in the property regardless, and the bank won't want to give you a mortgage in your sole name in that case.

So wait and see what the bank tell you and then engage a solicitor to find out what you need your ex to sign.

BabsieBoo · 10-11-2021 6:00pm

https://www.boards.ie/discussion/comment/118147217#Comment_118147217

Hi and thanks, the solicitor is already involved and requested the deeds already (which were released because indeed my ex signed he was in agreement for this to happen). Making a cash contribution is not an option - it's 30k more in outstanding mortgage than evaluation and I simply don't have 30k lying around (and forget my ex having it)...

BabsieBoo · 10-11-2021 6:03pm

https://www.boards.ie/discussion/comment/118147190#Comment_118147190

Yes we are absolutely in talking terms and he wants me to take over deeds + mortgage. He lives abroad and literally has zero interest in anything to do with the property (and the mortgage needless to say).

It's a tracker mortgage I have...

seamus · 10-11-2021 6:07pm

So while the lending rules prohibit someone from borrowing the deposit for a house, your case is special and the lending rules (afaik) do not prohibit you taking out a 5 year loan to cover that 30k. At ~9% that works out around €616/month.

But I wouldn't jump at that. If your intention is to remain in the house permanently, then paying that €30k off at mortgage rates over a longer term will cost a little more over the life of the mortgage but will be a lot more manageable.

If the bank suggest clearing the 30k, I would push back on them and convince them a mortgage is the way to go and don't try to clear the negative equity unless they completely stonewall you.

BabsieBoo · 10-11-2021 6:15pm

https://www.boards.ie/discussion/comment/118147289#Comment_118147289

I don't live in the property though, it's rented and I cap the gap to the monthly mortgage repayments...

coylemj · 10-11-2021 6:29pm

https://www.boards.ie/discussion/comment/118147328#Comment_118147328

If your motivation for making this step is to remove your ex's name from the mortgage to protect your family's property rights then you will also need to get him removed from the title of the house. The fact that the house is rented means that it is not a 'family home' so all sorts of unexpected effects (including capital gains tax) could arise if you change the ownership now.

You need independent legal advice. Talk a solicitor before doing anything.

BabsieBoo · 10-11-2021 6:35pm

https://www.boards.ie/discussion/comment/118147404#Comment_118147404

I have a solicitor and she told me we will need to declare that it is not a family home but has not spoken about other issues such as capital gains tax.

Seriously I want to just leave it alone and forget about :( why does it have to be so complicated and stressful?? And ironically my ex is going about his life with not a care in the world

coylemj · 10-11-2021 6:52pm

https://www.boards.ie/discussion/comment/118147429#Comment_118147429

Considering it's now in negative equity, CGT may not arise but for example, if you moved out of the place when the value was depressed after the last property crash, have been renting it since and it's value has gone up in the interim, there could be a liability. The taxman may decide that changing the ownership structure means that that gain has crystallised and CGT is due on it.

If you bought it as a rental investment and never lived in it then there can't be any CGT liability since it's now worth less than the loan which you used to buy it.

BronsonTB · 11-11-2021 9:59am

https://www.boards.ie/discussion/comment/118147328#Comment_118147328

Ah, that does make a big difference. A bank will want you to sell it, divide the difference between you into a term loan similar to the mortgage. That's the only way to have an immediate clean break at this point.

Alternatively, you continue as is until the neg equity is eroded & then apply for a buy to let mortgage in your own name effectively getting a clean break then.

I wouldn't spend too much on a solicitor & more so engage with your bank to see what options they will give you.

I've seen this scenario occur with my brother & in his case it was easier to let the property value increase to remove any neg equity & he spent money on a solicitor that came to nothing.

BabsieBoo · 11-11-2021 12:46pm

https://www.boards.ie/discussion/comment/118149526#Comment_118149526

Gotcha - thank you. Waiting on PTSB to get in touch.

Geuze · 11-11-2021 3:25pm

AAM may have helpful responses to this query.

Changing mortgage from joint to sole

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