Has this happened to you - mortgages and ownership

[numbbrain]

Hi

We are in the final stages of our financial consent order and have come across a situation that I don;t know how to solve.

We have agreed that EXH will pay the mortgage for the next 2 years while I build up my business. He is signing the house over to me and I will get the equity, but the mortgage company won't allow him to transfer ownership as I don't have 2 years worth of accounts yet.

So this means he has to stay as the owner for 2 years. I don;t want him to have any say in the house from the point of decree absolute.

Should I delay absolute for 2 years?

If he transfers ownership to you, then he is paying a mortgage on a property he doesn't own. If he defaults, the bank can't claim the house as he doesn't own it.

If you delay over a year I believe you have to explain to the court the reasons for a delay so may be worth getting advice on what is classed as "valid reasons" or is there an alternative option you could take

I guess the answer is he stays as an owner for 2 years.

The only other option is we sell the house, but I don;t want that either and nor do the children.

If he defaults he will be breaking the terms of the financial consent order.

The lender can’t rely on the consent order to ensure he pays the mortgage or to cover loses if he defaults . It can only be enforced by you. Even then if he loses his job and cannot pay, the order would be meaningless. The lender essentially has a large unsecured debt as the owner and the debtor are not the same person. That’s not a mortgage.

You have another option which is to take a PAYE job which allows you to take out a mortgage.

What does your solicitor say?

This sounds like a recipe for disaster to me. It sounds like it’s not just that you don’t have 2 years of accounts - but also that if you are “building up” your business, you don’t have a high enough income currently to be approved for the mortgage on your own? (and I don’t mean whether you could afford to pay it, but whether you would pass affordability checks).

You have several risks here:

• are you going to be earning enough in 2 years?
• will affordability checks tighten in the next 2 years?

Has your solicitor discussed a Mesher Order with you? That would give you the right to reside on the house, with him paying the mortgage. He doesn’t get a say in the house day to day - he won’t have to right to reside or enter. That’s often done until youngest child is 18. It’s unusual to add statements like “you will take all possible steps to end the Order, by taking over the mortgage when you have 2 years business accounts”.

It’s restrictive to him to be tied into the mortgage for years, so he may not be keen! But if it’s really important to you to stay in the house long term, and you can’t be 100% certain of being approved in 2 years, I’d really be talking to a solicitor about your best options.

Sounds a bit worrying....a lot can happen in 2 years and what happens if for whatever reason he can't/won't pay the mortgage and you are able too either?