Buying out XH and secured loans taken on house

[lemonadesalt]

I am planning on buying out XH for the family home, which is in his name and still has 15 years left on the mortgage. However over the years he has borrowed a large amount on secured loans, for credit cards and other spending, increasing his monthly mortgage payment drastically. He agrees that the debts are solely his. This means that if I were to buy him out my mortgage payments would be lower isn't it? How do I find out what the numbers are on this? I know very little about mortgages and I don't know the terminology for the numbers I have to ask for. I've been doing some googling to learn more but haven't been able to find this out. Any help appreciated. TIA

It’s not as easy as that, you need legal advice. If his debts have been taken out within the mortgage then you cannot really “buy/take” the house separately from those debts because those debts have been allowed due to the fact if he defaults then the house is their payment.

Secured loans on a property can’t just be separated from the property, the property is their reassurance if he was to default, so either the house & debts become yours or neither

Thank you for replies so far. So if a complete stranger buys the house they take on his debt as well?

He needs to clear the debts - either by paying them off with funds or taking a personal loan to pay them off (not secured on your house) I think he will protest at this because normally you get better terms if secured again the house - so he will be paying more interest if another loan is needed. I would seek advice from a financial advisor to see how loans are structured on the mortgage, this may have been covered if your already divorced.

Sorry didn't mean to attach to another post!

No, no one would take on the debts. If he sold it the money from the sale would have to go first to pay off any secured debts, then if any was left he'd get that. The secured creditors have to agree to remove their mortgage/charge over the property for a sale or transfer of title to go through, usually they do this after being paid out. You can't take over the mortgage or any other secured debt in that way, you'd apply for your own mortgage/loan then pay him the agreed amount which he would have to use to pay those debts. If what you pay him isn't enough to cover the debts it's unlikely they'll release the charges over the house unless he has another way to pay those debts or pays them out with new loans. Things get messy if what you'd be paying him won't cover all the SECURED loans he has. Unsecured loans don't matter in this specific context.

No. As PP says when he sold the house to a stranger he would have to use the proceeds of the sale to pay off those debts.

Thank you so much everyone, especially @EliflurtleAndTheInfiniteMadness for patiently explaining it all. I needed that, I have some thinking to do now. Seems more complicated than I thought

A loan secured on the house is effectively a second mortgage. The equity in the house is the value less all the loans secured on it.

Therefore, if the house is worth £500,000, the mortgage is £100,000 and the secured loans are £200,000, the equity is not £400,000, it’s £200,000.

To ‘buy out’ your husband (if you’ve agreed he has half the equity) and have the property free and clear in your name, unless he pays off the loans, you would need a mortgage of £400,000 - £300,000 to pay off the current loan companies and £100,000 to your ex.

Obviously you would be mad to do anything of the sort but the loan companies are not going to remove their charge without being paid. It doesn’t matter if he has agreed the debts are solely his - the loan company will not release their claim on the house so they are effectively also yours unless and until your ex repays the loans.

Will what you are planning to pay him cover the secured loans?