Coming off a mortgage, but retaining ownership?

[Afterglow78]

Hi all,

Hopefully someone knowledgeable can help with regard to coming off a mortgage. I spoke to a mortgage advisor last year but I cannot get hold of him and my memory has failed to remember the details. So, I still have a mortgage with my Ex on the family home where she lives with the kids and we have a fairly even split of the kids. We never married and separated 5 years ago, and neither of us were in a position to buy the other out, and we still aren't even with a relatively small 55k left to pay. I have no intention of pushing for a sale of the property as it's where my kids live and go to school. Anyway, to allow me to continue with my life, free myself up loan wise and hopefully buy somewhere, my mortgage advisor said it is possible for me to come off the mortgage but still remain an owner. I think he said a solicitor can sort out the form, process or whatever is needed. I just can't remember the terminology so I can explain it to my Ex properly. At the same time we could agree a financial split since we never really sorted this, and put this in writing for when the time comes to sell.
So not sure if anyone has been through similar but any advice on the process would be most welcome. Thanks.

[MarieG10]

Mortgage companies tend to be very reluctant to allow this as currently you are both liable for the full mortgage payment. Worth asking but she would have to be able to meet income tests to prove she could afford it, but then they might not be happy for you to remain on the deeds

[suggestionsplease1]

Your ex would have to transfer the mortgage to her own name and go through the full affordability process, so she has to be willing and able to do this.

Then I guess it's probably possible to ringfence a percentage of the property value in the event of a sale, according to your previous deposit/ contributions, and this would go to you at such a time? That would have to drawn up so that it is binding. It's not ideal really, and arriving at that percentage might be tricky.

[Afterglow78]

Yes the percentage discussions make me quite anxious! I originally paid in a 75k deposit from my previous property, so I think I'm reasonable in expecting this back, and then a split of the equity. I'd be happy with 30%, after all my kids do live in the other property and I want them to be happy.
The mortgage advisor seemed to think remaining an owner yet coming off the mortgage was entirely possible, it was his suggestion. I think I just need to know what needs to be completed legally to achieve this.
Failing that I'll have to remain on the mortgage with 55k outstanding which impacts my borrowing power so to speak, with this being subtracted off any future second mortgage. It just feels like a risky thing knowing any defaults on that original mortgage will cause me future issues. I feel trapped the way things are but neither of us can buy the other out.

[suggestionsplease1]

I guess the best way forward to have managed it for once and for all is to sell the property, but understandably you don't want to do that.

I don't think it can be worked so that you are guaranteed your 75k as a cash figure back, because no one knows how prices will be in the future - if there was some sort of complete melt-down of the property market and suddenly everything was worth only 25% of what values are now - well you ex would do really badly off that, as that 75k might be work 90% of the property, if you see what I mean.

So I would imagine, (if it's even possible), you will both need to take advice on arranging a percentage share in the property. And then there will be all the considerations that your ex wouldn't be able to remortgage I don't think, or take a loan against the house...and would the mortgage provider have first dibs over you on a forced sale?...etc

I would be interested to hear how you are able to work it out. I imagine you are not alone in this sort of difficulty.

[suggestionsplease1]

your ex would do really badly from that, as that 75k might be worth 90% of the property value...

[millymollymoomoo]

If you’re not married the key piece is how do you own the property ! If joint teneants you Ian 50% share each regardless of who paid what
If tenants in common it would depend on how you’ve set this ( defaulting to 50% in the absence of other shares)

If you wish to give more you can agree but legally you have 50%

[Afterglow78]

We're not married and I'm 99% sure the mortgage is joint tenants and it's currently a 50/50. However kids are involved, 7 & 13, and the fairly amicable relationship we have now could break down leading to court etc which would end up with the Ex fighting for a much larger share. I don't want to gown this route and just do what is fair.

[millymollymoomoo]

As you’re not married it will be hard for her to fight for higher share ! She’d have to go under the children’s act or tolata route which is much harder claim this is why women are always warned go get married

That said, it’s good that you are trying to reach an amicable agreement and trying to help her re housing of the children and providing stability

[ChicCroissant]

It may be possible, but it would limit her choice of mortgage providers going forward as not all companies are willing to have someone on the deeds that is not on the mortgage.

[Afterglow78]

I finally got hold of my mortgage advisor who advised that my Ex would have to apply with our lender to take the mortgage on herself, pending affordability checks. We would also find a solicitor who would remove myself from the land registry and deeds, but would also put a 'charge' and 'deed' (deed of trust maybe?) on the property to protect myself financially for future equity split.
I guess I will start talks with the Ex at some point in the coming weeks and hopefully it will go smoothly!
This info may help someone else who might be in a similar position to myself.