Retaining a tracker alone post divorce in 2014?

thirdparty

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Is it possible for one signature on a tracker mortgage to retain the tracker mortgage alone with their lender post divorce? The lady in question, let's call her Rosy, has the mortgage around 13 years but she has been paying it entirely on her own for about 11 years despite her ex-husband-to-be, let's call him Jim, only moving out around four years ago. Rosy believes she can prove this fact to a judge or her lender with bank statements etc where necessary. For the moment the divorce has not been put to Jim as Rosy is seeking legal advice etc first. A solicitor she met with recently, who admitted they would need to check all of this out, said that there may only be two options to get her ex's name off the house:

1. Jim either waives his right to the house accepting that if there was ever a problem with payment the bank may come looking for money from him

2. If Jim refuses to sign away his rights to the house, taking out a loan to make an offer of 10k, half the equity of the house, may lead to him signing the waiver, but he would also have to accept the bank would come looking for money from him if there were ever a problem with payment

The solicitor went on to say that there have been cases where the banks refuse to take one person off a tracker because if there is a problem paying the mortgage having the option to chase two people for money is better than one.

We estimate the difference in tracker versus a non-tracker mortgage to be between €500 and €700 extra a month.

Jim raised concerns at some point in the past that he wants to know the house will be left to his child that lives in the house. We had heard this could be put on paper but that it could cause problems, god forbid, if the child grew up and ended up on drugs or an alcoholic etc.

Please advise.
 
Anything is possible. but generally lenders tend to be very slow in agreeing to what you propose. As things stand both parties are liable on the loan and you are probably aware that Jim may have a legal right to 50% of any equity. Divorce agreement should clarify what leagal rights he has.
Even if this is resolved the relevant Bank will have to agree to grant a new loan to Jim's ex in her sole name to refinance the existing loan. I have come across some situations where a compromise on the Int rate has been agreed. I.e. Tracker rate retained but at an increased margin. This can be negotiated with the Bank. They will not be a party to any side agreement re leaving the house to children. This will be outside any remortgage issues on the property. Priority at this time is Jim's willingness to co-operate with any agreement and Mrs Jim's ability to repay any restructured mortgage on her own!
 
I see from the sticky at the top of the forum certain lending institutions have allowed one person on a joint mortgage to retain the tracker on their own although the most recent of which was in 2013 - is this still going on in 2014?
 
Anything is possible. but generally lenders tend to be very slow in agreeing to what you propose. As things stand both parties are liable on the loan and you are probably aware that Jim may have a legal right to 50% of any equity. Divorce agreement should clarify what leagal rights he has.
Even if this is resolved the relevant Bank will have to agree to grant a new loan to Jim's ex in her sole name to refinance the existing loan. I have come across some situations where a compromise on the Int rate has been agreed. I.e. Tracker rate retained but at an increased margin. This can be negotiated with the Bank. They will not be a party to any side agreement re leaving the house to children. This will be outside any remortgage issues on the property. Priority at this time is Jim's willingness to co-operate with any agreement and Mrs Jim's ability to repay any restructured mortgage on her own!

Thanks for the reply Brendan. You must have posted as I was typing my last. Well she can definitely pay the mortgage on her own as she has been doing so for more than a decade! Yes, we are not sure how willing Jim will be although it would help if Rosy knew what she was approaching him with, that is if the bank are going to allow her take his name off the mortgage or if she is going to have to keep his name on it but approach Jim about signing something to waive his rights...

It would be crazy for Rosy to approach the bank on her own first, right? Should Jim be approached about this during the divorce or before?
 
The fact that she has been paying it herself does not necessarily mean she can afford it under the bank's lending criteria. If I was Rosy this is the first thing I would check, ask the bank would she qualify for the outstanding loan amount on her income. If she doesnt then she's going nowhere trying to get him off the mortgage. A judge can say the house should be hers if that's the way the case goes but that doesn't matter a toss to the bank, they are not bound by that decision to remove a name from the mortgage.

If she does qualify then it is simply luck whether or not the bank will leave the tracker remain while removing a name. They can of course technically do it but whether they will insist on a new mortgage at variable rates or not is up to them.
 
Is there a risk then going to the bank at all, I mean if they tell her she would not qualify they will then know the situation she is in - could they force her off the tracker then?
 
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