single person bought house with ex partner who now pays full mortgage, cannot afford

Age:
30

Annual gross income from employment or profession:
E25,000

Type of employment:
private sector

Expenditure pattern:
spend everything i get on bills mortgage etc

Rough estimate of value of home
E80,000

Mortgage on home
got 100% mortgage in 2005 on €200,000 property, left to pay after 9 years is €172,000 approx.

Mortgage provider:
Ulster Bank
Type of mortgage: Tracker, interest only, fixed rate
variable

Interest rate
4.6% approx, i would have to check this exact figure.

Other borrowings – car loans/personal loans etc
credit card bill

Do you pay off your full credit card balance each month?
No

Savings and investments:
€5,000 savings.

Do you have a pension scheme?
No cannot afford to pay into scheme

Do you own any investment or other property?
No.

Ages of children:
None.

Life insurance:
Yes.

What specific question do you have or what issues are of concern to you?
I bought a house with my ex-partner in 2005 and got full 100% mortgage. We purchased for €200,000 in the boom. The ex-partner moved to Australia and stopped paying his share of mortgage. I applied to bank to take over mortgage in my own name but they refused. Now the joint account is still in being and I just pay full mortgage on my own. The interest in the house has been transferred into my name.

I am in a situation where I am constantly crippled with mortgage repayments every month and I constantly struggle to keep up with all other bills and expenses. I am just looking at all my options about what is the best solution to my situation. I have heard about split mortgage but not sure if this is the best option for me. I would like advice before I go in and talk to my bank so I am more informed of all the options open to me. My house is in negative equity and is only worth about €80,000. I am also faced with new water charges and water pipe maintenance I have to get done before the end of the year and cannot see how I am going to be able to afford all this.

I have been considering these options:-
1) hand back the keys, should I stop paying my mortgage?, how long would I be in bad debt for? And will this be cleared after so many years??
2) talk to bank about split loan, does this suit my individual situation?
3) consider County Council route where they may take over my house for 4 years and rent to others, do you have to be a registered landlord for this?
4) are there any more options open to me?

I applied to bank to take over mortgage in my own name but they refused. Now the joint account is still in being and I just pay full mortgage on my own. The interest in the house has been transferred into my name.

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Are you sure about this?

There are two things
Ownership of the house.
Liability for the mortgage.

If UB refused to allow your ex off the mortgage, it's very unlikely that his name is off the deeds. You and he may have made a side agreement between you, but in reality, if you don't pay the mortgage, they can pursue him. It might be theoretical if he is in Australia.

From your point of view, if you pay down the mortgage and eventually return to positive equity, if his name is still on the deeds, you won't be able to sell it without his approval. He may insist that he owns half the house and you will spend a lot in legal fees defending your position.

Assuming he is still on the deeds, you should not pay any more than interest only.
By paying the full repayment, you are paying down your ex's share of the negative equity.


It seems to me that your mortgage is unsustainable.
You need to have this conversation with UB and see what deal they offer you.
They do very few split mortgages, but they might offer you an interest rate reduction for 5 years.

If you can't reach a generous agreement, go bankrupt
Tell UB that you intend to go bankrupt. They might do a deal with you to allow you to sell the house in an orderly manner and do a deal on the mortgage shortfall.

Don't bother with trying to rent out the house
You need finality on this. You made a mistake when you were 21. You now need to draw a line under this. Don't mess around with "solutions" which will leave you insolvent for the rest of your life.

Fully agree with the advice given by BB. You will find that the property is still in both names as your ex's interest cannot be removed from the property without his involvement. Bankruptcy would be unnecessary given your income and lack of other assets. Pay off your credit card from your savings. This is costing you a lot of interest. You need to rid yourself of this property and should consider voluntarily handing back or assisting UB in selling the property. You will need advice in dealing with the Bank as UB are very difficult to deal with an extremely slow in responding to any request.

Many thanks for your response, I am most definitely sure that his name is off the deeds. I had been in contact with him when he stopped paying mortgage as this is what I was afraid of,.. if I ever sold the house he would have a claim in still having an interest in the house. I sent a Transfer to him and he signed in Australia agreed to transfer his interest to me and this was completed. This Transfer was registered in the Land Registry. I presented this Transfer in my application to take over the mortgage but this was refused. I was advised at the time my application was refused by the bank that the only way he would be liable for anything is if I stopped paying my mortgage and the house was sold by bank that he would be jointly liable for the shortfall - is this correct?

Yep, that explains the name off the deeds! Yes you both would be liable for the shortfall. However, they would be unlikely to chase him in Australia, unless someone passed on his address there, even then they would see him as an unlikely source of funds.

I sent a Transfer to him and he signed in Australia agreed to transfer his interest to me and this was completed. This Transfer was registered in the Land Registry.

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This still does not sound right. To get ownership you would have had to do a conveyance to "buy" out his share. You would have had to pay stamp duty.

Did you do this or did your solicitor do it for you?

Brendan