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Legal advice please from anyone in the know about house ownership/mortgages

(12 Posts)
doublewhammy Fri 28-Sep-12 10:07:31

My ex-partner is still named on the mortgage of the house DS and I live in. So although we have agreed he has no equity left in the property (I've paid him his share), and I pay the monthly (interest-only) mortgage, he co-owns the house with me (not ideal).

We need financial separation. I have sufficient cash to pay off most of the mortgage, retaining it (much-reduced) in my name only - BUT this would mean getting rid of a very good (extremely low-rate) mortgage, my ex-partner not being able to benefit from the mortgage we're both named on (the lender won't do a split port), and me having no cash left for a rainy day (replacing the car in a few years, etc), nor to address some looming maintenance issues with the house.

The property is such that I could extend and remodel it to make two. My idea is that if I invest my money in doing this, and sell one of the properties, this would more than clear the mortgage (I wouldn't need to be on it at all anymore), my ex could then take on - and benefit from - the mortgage moving forward, and the potentially expensive maintenance issues with our home would be addressed for some time to come. My calculations also suggest I'd still have some money left for a rainy day (replacing the car, etc). So I'd be financially secure, in the home DS has always known, and my ex would be happy too.

My ex is on board with this idea; he'd like the mortgage. However, I have asked him if he would transfer the beneficial title to me from now (i.e. before I submit for planning and effectively start investing in the property), and he won't. He says he will feel too vulnerable financially, which I understand in theory, although I have never not paid the mortgage and have a healthy financial track record and a lump of cash in the bank - and it's in my best interests to make it work. He, on the other hand, hasn't been great with money; he has blown a lot, and been untrustworthy with shared/business money in the past. So I would need some kind of safeguard for the money I'd be investing in the property, and the assurance that I'm not risking my home; that it's still mine. And without the beneficial title transferred, surely in legal terms, he could obstruct a sale of the house, or make a claim to half the equity in the property, if he ever decided to become difficult.

He has said he's happy to draw up a contract, but not transfer the title. So it's messy. And if I could do the project without him on the mortgage at all, I would (I have a voluntary sector job that I love, but it doesn't pay much). But I do see the fairness in him ultimately getting the mortgage if I can undertake some work on the house which means I don't need it, and also leaves me in a better financial position.

Anyway, sorry this is a bit long (it's complicated!), but is there any way at all for me to be able to proceed with this project with my ex still on the mortgage, and without the beneficial title being transferred to me, while still safeguarding all of my investment (and the corresponding increase in value in the property)? I'd want something in place that would stand up in a court of law; otherwise, I'm not prepared to take the risk.

Failing that, how else could I possibly finance it? My ex and I have agreed that, if we can't agree, I'll simply pay off most of the mortgage, retaining what's left of it in my name only - and hope the house doesn't cost me too much as we move forward! But this seems a shame, and a bit of a ticking time bomb. DS is so, so happy and settled here, and we have friends and his school just around the corner. It really is home. I've asked if my parents would be willing to be named on the mortgage just for a couple of years, but they're not keen.

Maybe it just can't be done?

cestlavielife Fri 28-Sep-12 10:23:46

if you have bought him out and given him his equity then he ought to transfer the title - is it tenants in common or joint tenants? what happens if either of you dies tomorrow?

you need to get this clarified

dont understand why you need your parents named on the mortgage ?

Collaborate Fri 28-Sep-12 10:40:17

I'm confused. If you've paid him an agreed sum for his interest in the property then you are already the beneficial owner. You could execute a deed of trust to make it more secure. You could then deal with that at the Land Registry (I think by entering a Restriction or Estate contract -but a conveyancer should be able to tell you more.

You can't transfer a mortgage to another property.

cestlavielife Fri 28-Sep-12 10:41:45

yes you can port a mortgage

cestlavielife Fri 28-Sep-12 10:43:37

but depends on mortage company if they will alllow porting of mortgage -eg

"changes introduced by Nationwide Building Society – which has one of the cheapest standard mortgage rates on the market. It has now imposed new restrictions which mean many people moving home will be unable to take their low-cost home loan with them. "

cestlavielife Fri 28-Sep-12 10:44:11

doublewhammy Fri 28-Sep-12 11:31:17

cestlavielife, thanks for your post. I own the equity in the property (having paid him half), and I pay the monthly interest payments. But he won't transfer the title. I haven't bought him out in official terms, because I don't earn enough to formalise this with the mortgage lender and take the full mortgage on in my name only (and nor does he now - the mortgage was set up in boom times when we had a very successful business).

Collaborate, by paying him his equity share, my understanding is that I am not automatically the title owner; only if the title is formally transferred, with his agreement. Thanks for your advice though, WRT deed of trust - I'll look into that. But a solicitor has already said there's no way to proceed with this without one of us being in a somewhat vulnerable position. I have been for years now, and I have the better track record with finances, so I think it's his turn - especially if he wants the mortgage at the end!

I think it would be fair to transfer the title it, and a solicitor advised me this is common practice with separations where children are involved. But he won't. So legally, I suppose, he could still attempt to claim half of the £60,000 equity in the home if he chose to (and any more I invest), and I feel insecure about this. I have said I would like to get something settled ASAP anyway, build or no build, for the reasons you suggest - what if I/he dies, etc.

My ex has said if we can't agree something, then I can pay off most of the mortgage, keep what's left in my name, and we'll both move on. I asked my parents to come on with me, so I could retain more cash to be able to do the build anyway - selling a second property would then enable me to be mortgage-free, and address the looming maintenance problems with the house, give me lower running costs, etc. We'd also like less garden to look after - it's quite a big place to keep in order - and remodelling and subdividing would achieve this and a lot more.

We have been advised by the mortgage lender that we can't do a split port on the mortgage, but that either of us can have the mortgage in our own names (reduced to reflect our income), I could have it still on this property with a new partner or family member coming on to it, or it could be ported (together still, or independently) to another property. But as I said, they won't split-port it (i.e. we can't take a bit of it each). I hope this makes sense? I realise it's messy.

Thank you both for posting.

Collaborate Fri 28-Sep-12 11:39:56

The registered proprietor is not always tyhe beneficial owner. Speak to a conveyancing solicitor about what they can do for you.

doublewhammy Fri 28-Sep-12 12:04:59

Thanks. What do you mean by 'registered proprietor'? I haven't heard that expression before. I thought you have to own a property's title with the Land Registry to own it. At present, both my name and ex's name are with the Land Registry as the title owners. Not ideal at all.

prh47bridge Fri 28-Sep-12 13:24:22

The registered proprietor is the person or persons registered at the Land Registry who is the legal owner of the property. The beneficial owner is the person or persons entitled to the proceeds of any sale or any rent if the property is let. In most cases the registered proprietor is also the beneficial owner but it doesn't have to be the case.

doublewhammy Fri 28-Sep-12 13:34:49

Thanks, prh47bridge. I think I need to be both then, don't I? The beneficial owner, so that proceeds of a sale are mine, and the registered proprietor to be able to make the decision to sell. Would that be right?

Giantbonsai Fri 28-Sep-12 21:34:31

I have just paid my partner his share of the equity in our house. I could not get a mortgage on my own salary. He agreed to keep his name on the mortgage for a set time period, as it's our kids home. A solicitor drew up a document transferring his beneficial interest to me. His name remains on the title deeds, as these are related to the mortgage. It's as watertight as you can get without having your own mortgage. The deed also indemnified him against my debt and any future mortgage payments. The mortgage company don't care as long as they get paid.

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