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Original poster

Mortgage advice please

28 replies

Vittoria123 · 12/10/2023 13:07

Hi all
many thanks for taking the time to read this post and I’d appreciate any feedback I get from the lovely community. Let me give you a bit of a background story . My partner owns a house where is ex lives with their child and it is co parenting . The house must be sold due to the high interest rates . He currently pays 1700 a month on the mortgage and we are renting a flat where we live with our baby where we pay 1525 a month . If the house gets sold it would go into negative equity due to the current market . Even if we downsize it would still be a squeeze . He can’t remortgage or ask for breaks and he earns over 80000 £ a year but he has a daughter at uni who needs looking after . What options he would have in terms of the house ? Any advice would be highly appreciated it .
many thanks to all

OP posts:
Chewbecca · 12/10/2023 13:27

What's the approx. value of the house and the outstanding mortgage? When was the house bought?
Does the person living there contribute?

Avidreader12 · 12/10/2023 13:37

Who owns the house just him or him and his ex? Is the mortgage just him or again joint? Answers would depend on the ownership of the house/ mortgage.

Original poster
Vittoria123 · 12/10/2023 16:58

Hi
many thanks for your reply .
he is the only owner of the house .

OP posts:
JonjoMonjo21 · 12/10/2023 17:04

Why can’t he remortgage with an income of 80000?

Sparkle123r · 12/10/2023 17:33

I'm not really sure what your after if you are saying he can't sell and he can't remortgage?

Those would be the two options.

If the house needs to be sold, then I'm afraid the equity issue will just have to be taken as it is. How old is the mortgage and what is the balance left. I'd be surprised that there will be that much negative equity as the house must of been purchased awhile a go if he has a new relationship and baby with you.

I only purchased my house 3 years ago, and despite prices dropping recently, it's worth more than it was 3 years ago, and the payments I have made been by equity has grown.

How old is the child that lives in the home? Is it the same child that is at university? Or does he has a younger child that is living in that home?

Of course though, nothing can be done unless the mother has left anyway, so that's the part that probably needs addressing primarily

Original poster
Vittoria123 · 12/10/2023 17:55

Hi
yes it is interest only so the balance never goes down , it is about 250000 ( the balance ) there is a child at uni and one in college who lives part time with us and part time with the mother . She is 17 years old . Thanks for your answer , bit of a pickle of a situation .

OP posts:
Original poster
Vittoria123 · 12/10/2023 17:55

The house was purchased over 15 years ago

OP posts:
JonjoMonjo21 · 12/10/2023 18:17

Why on earth would u only pay interest only when u earn that amount, I earn a quarter of that and pay 700pm , safe to say I now only owe 71000 from 160000. It seems the only option is the sell the house and get negative equity or, you move in the house and try and move the mortgage to a repayment one.

xyzandabc · 12/10/2023 18:25

1700 seems very high repayment for a 250000 interest only mortgage. If it's over 25 years, that's over 8%.

If it was bought 15 years ago, are you saying the value has not increased in that time? Or has it been remortgaged at some point to be in negative equity ?

FallingAutumnLeaf · 12/10/2023 18:25

So, if he had an interested only mortgage, what investment did he have to repay the balance at the end of the term? Can that be used to cover the negative equity?

250k mortgage outstanding. What do you think the house is worth?

Basically, selling or remortgaging are the choices. Or remortgaging and renting? Dors his ex pay rent to help him cover the mortgage? Or is she living there rent free?

loseweightpleasegod · 12/10/2023 19:44

Can you move into the house with him and remortgage as a couple?

Chewbecca · 12/10/2023 22:36

That doesn't really make sense. If it was bought 15 years ago, even if only interest paid, it would be very unusual to be in negative equity.
Can you share some more numbers?

Viviennemary · 12/10/2023 22:43

Was he married to his ex. If not I think she has less rights to remain in the house if it is solely in his name. It isnt very satisfactory if the ex lives in the house but he pays the mortgage as well as having,to pay for accommodation for himself. And the ex is making no contributionmto the mortgage.

Maybe he should see a solicitor to find out what his legal obligations re mortgage payments and maintenance are.

TheBabylonian · 12/10/2023 23:11

Something doesn’t add up here.

If it was bought 15 years ago for £250k then it would now be worth £350k.

No negative equity to be seen, just £100k profit.

But he is clearly not very good at maths or finance - unless he chose to invest money somewhere instead of the repayment and has that stashed.

FallingAutumnLeaf · 13/10/2023 06:49

Folk, stop dismissing the fact that not all houses are worth more than 15 years ago.
Last year we sold a house bought at the last peak for 500 pounds (not thousand, just straight pounds) more than we paid. The "only" equity we had amassed was from repayments (and over paying capital when interest rates were so low).
It's totally possible for the house to ve worth roughly what was paid for it.

sashagabadon · 13/10/2023 06:54

£1700 mortgage interest only must be a very expensive house! So if only £250 mortgage then lots of equity I would think. Plus if bought 15 years ago then shouldn’t be In negative equity , the numbers don’t make sense

Original poster
Vittoria123 · 13/10/2023 10:07

Hi
he wasn’t married to her . His ex doesn’t earn an income atm and lives rent free . The problem is she doesn’t want to move out as she would have no where to go . As I understand it , if she doesn’t want to leave , unless through eviction ( which costs a lot ) we can’t force her . Remortgage is not an option as it is not offered by the mortgage company. I appreciate your answer . Thanks

OP posts:
Sensibleandboring · 13/10/2023 10:11

Vittoria123 · 13/10/2023 10:07

Hi
he wasn’t married to her . His ex doesn’t earn an income atm and lives rent free . The problem is she doesn’t want to move out as she would have no where to go . As I understand it , if she doesn’t want to leave , unless through eviction ( which costs a lot ) we can’t force her . Remortgage is not an option as it is not offered by the mortgage company. I appreciate your answer . Thanks

Have you tried speaking to a broker? Just because the current mortgage company won't remortgage doesn't mean the other hundreds of mortgage companies wouldn't

AutumnDragon · 13/10/2023 11:28

Remortgage is not an option as it is not offered by the mortgage company. I appreciate your answer . Thanks

I think this makes him a Mortgage Prisoner and there are now new regulations around this. His best bet is to contact an Independent Mortgage Broker (Check out VouchedFor or I can recommend one) and discuss with them

The figures do not add up, Our Mortgage is a lot higher than that, it's a repayment mortgage and our monthly payment is lower than yours.

I appreciate he has a child living there, but the Ex can be evicted, it may take a while but the sooner he starts the process, the sooner it will happen (if you remortgage though there may be a penalty for paying off the mortgage early)

Outnumbered99 · 13/10/2023 11:58

He needs to chat with a mortgage broker, and then I suspect get much tougher with the ex. This situation is not sustainable for anyone.

Original poster
Vittoria123 · 13/10/2023 12:44

Hi
thank you so much for your answer. Yes , so the actual mortgage monthly payment is 1.500 plus a service charge of 200 £ ( monthly ) . We looked at similar properties selling for a lot less or not at all . Let’s say he would clear the mortgage if the house sold for 250.000 there or thereabouts but in the current market he wouldn’t be able to sell it for the same value so we envisage a negative equity of 15.000£ . Sorry for all these questions , do you happen to know how negative equity is payed ?
yes please could you recommend a good mortgage broker?

OP posts:
Avidreader12 · 13/10/2023 13:38

If you sell and can’t clear the mortgage than that will be a shortfall and has massive impact on credit rating. The mortgage company would look unfavourably on this if the mortgage holder hasn’t spoken to existing mortgage company before now he needs to contact them first around options. I can’t understand how he agreed to keep paying for a house he doesn’t live in just because ex lives there and for you both to have to rent. It should of ideally been sorted legally when they separated. The person who’s mortgage it is needs to seek independent advice approach existing mortgage company first then if can’t help a whole of market broker someone like L&C is whole market with no commission. You may wish to post on legal matters too.

Viviennemary · 13/10/2023 14:28

AutumnDragon · 13/10/2023 11:28

Remortgage is not an option as it is not offered by the mortgage company. I appreciate your answer . Thanks

I think this makes him a Mortgage Prisoner and there are now new regulations around this. His best bet is to contact an Independent Mortgage Broker (Check out VouchedFor or I can recommend one) and discuss with them

The figures do not add up, Our Mortgage is a lot higher than that, it's a repayment mortgage and our monthly payment is lower than yours.

I appreciate he has a child living there, but the Ex can be evicted, it may take a while but the sooner he starts the process, the sooner it will happen (if you remortgage though there may be a penalty for paying off the mortgage early)

I agree the ex can be evicted unless she has a court order allowing her to stay. It is ridiculous she has no job is living rent free and is expecting the mortgage to be paid. Your partner should start looking into starting legal proceedings and not be a doormat.

ilikeeggs · 13/10/2023 14:47

So the house is only worth about £235-250,000 but the interest only mortgage repayments are £1500? How does that work?!