My husband has an NE mortgage with his ex - we want to buy a house ourselves.

starbar

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Hi folks!

I’d really appreciate some advice on the following situation.

My husband bought a house with an ex girlfriend in 2007.

By the time the relationship broke down the house was heavily in negative equity and they were unable to sell.

For the past few years neither have lived in the house. It’s rented out and they both contribute equally to the upkeep of the house and the mortgage – the idea was to hold on to it until it can break even, or get close to it, and then they would sell.

Some current figures:

Balance on mortgage: €350K
Current valuation on house: €300K
Rate: PTSB Tracker at 2.5%

Our issue now is that my husband and I would really like to buy a house and start a family but with work, it’s not ideal to move into the house he already owns.

I’m just wondering, what are our chances of securing a new mortgage while we keep the old one ticking away?

Joint income: Approx €93K
Savings: €55K

Were both in permanent full time employment and have been for many years.

Is this something a bank might consider?

In a worst case scenario, we would consider trying to buy out his ex but that would mean taking on the full chunk of negative equity so it seems like it would be a mistake for us to do that.

Again, would the bank even let us do that since there isnt really a benefit to them? As I said, there have been no problems with repayments and since my husbands ex is a teacher, she might even be considered a safer bet than me since I work in the private sector.

Any advice would be greatly appreciated.

P.S. No children and no debt!
 
Hi. We are in a very similar situation,husband has house in negative equity with siblings,total disaster situation!We did get a second mortgage with EBS,a small mortgage but with our savings too,it was enough to get us a house we love. I may be wrong on this but all the different banks told us the same thing, Husband was liable for full mortgage on first property if others didn't pay. That's why they could only give us smaller loan. Worked out great in the end after a lot of mortgage applications! best of luck to you!
 
We were in a similar postion and went to a few banks and were given totally different answers but we end up going through chrome capital brokers who are based in merrion square area and they did wonders for us and we closed last month on a sale while keeping exiting property. I would be confident in getting a mortgage
 
Thanks for your responses! This is great to hear, the best scenario is definitely to keep the existing property as it is so i'll definitely contact that broker and see what they say about our case.
 
Don't go near a broker yet. Go to ptsb first.

It's a bit complicated, but you should be able to achieve what you want.

1) Your joint income is enough to take over the mortgage from your husband and his ex, so you do that.

2) You can then move into the house "with work, it’s not ideal to move into the house he already owns." It might not be idea, but it will do for a few years.

And as it's a relatively cheap tracker, the accommodation is very cheap. The interest is around €730 per month. Anything else you are paying is coming off the capital.

3) You could also get a tracker mover product from ptsb. They will allow you move your negative equity to a new property but the interest rate will rise to ECB +3.5%. Not great value. But you could switch lender at some stage in the future if the interest rates are lower elsewhere.


Dealing with the ex
In a worst case scenario, we would consider trying to buy out his ex but that would mean taking on the full chunk of negative equity so it seems like it would be a mistake for us to do that.

The negative equity is €50k. In theory, she should pay €25k to be out of this. But as it's a relatively cheap interest rate, the investment is probably very profitable and she will be reluctant to do so. But she might be happy to pay €15k.

It could be worth it to get her out of the picture.

Brendan
 
Hi Brendan, thanks for your response.

I was always under the impression that if my husband and I were to take over the mortgage we would lose the tracker - that we would basically be getting a new mortgage on new terms to wrap up the old one?

Is that not the case?

Also would there be a deposit involved in us taking over the mortgage?
 
Hi Brendan

I think Starbar's point is that it's not "their" tracker to port - the mortgage was taken out by Starbar's husband and his ex.

Would PTSB allow Starbar to take the place of her husband's ex under the mortgage without changing the terms of the mortgage? I wouldn't have thought so.
 
Hi Brendan

I think Starbar's point is that it's not "their" tracker to port - the mortgage was taken out by Starbar's husband and his ex.

Would PTSB allow Starbar to take the place of her husband's ex under the mortgage without changing the terms of the mortgage? I wouldn't have thought so.


Yes that's exactly what I meant, thanks Sarenco. I didn't think we could just take over the mortgage and move into the house at the same rate as per what you said here:

1) Your joint income is enough to take over the mortgage from your husband and his ex, so you do that.

2) You can then move into the house "with work, it’s not ideal to move into the house he already owns." It might not be idea, but it will do for a few years.

And as it's a relatively cheap tracker, the accommodation is very cheap. The interest is around €730 per month. Anything else you are paying is coming off the capital.


I would be delighted to be wrong though!!
 
It really depends on the policy of the lender. If the new borrowers have the capacity to repay, they will probably allow the "transfer of the tracker" but with an additional 1%.



Brendan
 
Thanks for the info!

In that case, given that our rate would likely be ECB +3.5%, plus we'd be taking on the majority if not all of the negative equity in the property, it seems to me like we would be making a bad investment in the same property twice!!

I will look into all our options will the banks directly though and see what they have to say!
 
I have a bit of a clanger of an update on my situation. We discussed the possibility of us buying the property outright with my husband’s ex.

She is only willing to sell her half of the property for the price she originally paid for it. We did not see this coming. The house is currently worth about €100-120K less than the price they bought it for so us buying her out is a complete non-runner.

She has no interest in buying us out and is happy to keep the property for the full mortgage term as an investment.

Do we have any out here at all? Or are we chained to that property forever? Could we force a sale when it’s no longer in negative equity?

They made no agreement for a scenario like this when they bought the property.
 
Hi starbar

There isn't that much you can do here.

I think that there is a High Court procedure but that would be very expensive.

You probably will have to wait until the NE is gone, and then ask again. If she refuses, get your solicitor to begin legal action.

If you manage to buy a house yourselves, then you could take the very risky step of stopping paying the mortgage. This will wreck your husband's credit record and his ex's. But it would probably motivate her to do something about it. Needless to say, you should threaten to do that before you do it.

Brendan
 
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