Getting my name off a tracker mortgage with Ulster Bank

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Mizen Head

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Hi. My niece has asked me for some advice on this very question.
Herself and her husband have a Tracker with Ulster Bank. They are now, regrettably, splitting up and the husband wants to take over the house and Mortgage. They are fully up to date with payments and have never had arrears or anything.
sums:Mortgage outstanding 300,000. House value 200,000. Niece has 50,000 to pay her share of neg. equity. Husband needs new Mortgage in his sole name for 250,000. HE is a full time civil servant on salary of 65,000, and no other loans. Advice on approach, please
 
Hi Mizen Head

I don't think that your niece should contribute €50,000 towards this.

A mortgage of €300,000 on a cheap tracker is the equivalent of a mortgage of €240,000 at SVR (depending on rate, term etc.). So the effective negative equity is €40k not €100k. Her share would be closer to €20k.

If UB doesn't allow her take her name off the mortgage, she and he can do a side deal where she renounces her interest in the property and he agrees to make all the repayments.
 
Brendan Burgess said:
I don't think that your niece should contribute €50,000 towards this.

A mortgage of €300,000 on a cheap tracker is the equivalent of a mortgage of €240,000 at SVR (depending on rate, term etc.). So the effective negative equity is €40k not €100k. Her share would be closer to €20k.
Click to expand...

My opinion;

A mortgage of €300K is a mortgage of €300K, the repayments on a cheap tracker might be around that of a SVR mortgage of €240K but the negative equity in this case is still €100K.

I don’t see any reasonable argument for him having to take 80% of the negative equity if Ulster Bank allows him to take over the cheap tracker.

They both benefitted from the cheap tracker and he would continue to benefit, that would be his good fortune, not something he should have to pay his ex for.

I think the niece should pay her €50K of negative equity.
 
Hi twofor1

As a matter of interest, which would you prefer? A €300k mortgage at ECB + 1% with 20 years to go or a €280k mortgage at SVR with 20 years to go?

Brendan
 
Thanks for both replies. I had not looked at it the way Brendan had. The problem is that the alternative to husband taking on the mortgage is sale of house,...this would cyrstallise neg equity of 100k, but husband does not have 50,000...so wants to go with keeping house. Niece will gladly pay her 50k to be rid of him and house..so she can start afresh. She would rather not be still tied on mortgage..but Brendan's side deal is a good possibility if UB dont go for sole husband mortgage. Any suggestions on how to present the case to Ulster, for sole mortgage.. they want to meet UB soon to move things along. (there are no other issues; no children, niece has good civil service job also.)
 
Fair play to this couple for coming to a common sense agreement on how to handle their joint asset. 50K / 50K split on the negative equity portion, done and dusted in a civilized way.

The lady in this case is getting a good deal also, she doesnt need to pay estate agents or Solicitors for selling the house and the deal is nice and clean and she can get up and go and get on with her life. That's gotta be worth something

Probably the last thing that this couple need right now is some sort of bickering over the cheap tracker. There is nothing certain about the cheap tracker, the gent in this case may decide to sell in a year or two either out of necessity or choice, so the value arising from it is arbritrary.

I've never been divorced but I would like to think if it ever happened it would be done in a civilized way and the need to get anal about every last possible cent wouldn't arise. God help us all.
 
Whats important to the Niece here is getting rid of the loan. If she offers the bank 50K to get off the loan they might just accept it. I doubt they'll accept much less. If the house has to be sold and the husband doesn't have his 50K then the Niece will be on the hook for the full 100K. Its very much in the Niece's interest to get this deal through
 
Hi Importer. Thanks...Yes, this is the key bit as far as she is concerned...get off the Mortgage. (and why she will pay her 50k) She does not want to be tied to the Husband in any way. ( once, house issue is sorted they can agree Separation agreement, and all will be legal)

But, I really need a few pointers on how to approach UB to let her off mortgage, and continue tracker (for new lower figure 250k, with him)
 
The OP on this post..kcb, spoke about re-applying for the mortgage and meeting UB 'criteria'. I guess you mean that Husband here, will apply for mortgage, based on his salary etc, which is fair enough.

But, any points, arguments, approach, which may help secure loan, at Tracker rate, while leaving Niece off, would be very helpful.
 
I think what your offering must be quite attractive to the bank in itself.
The bank gets 50K which will reduce the negative equity and your niece's
husband has quite a decent salary and presumably a secure position.
To state the obvious she can't agree to part with her money until the bank is in full agreement.

As regards taking away the tracker, I dont think they can get away with that
but they may try. I think she just needs to go in and state her case.
 
Hi Mizen Head

The key issue here is that your niece is not in effective negative equity, so financially, she should not be paying €50k to get out of this.

It is important that you, she and her ex understand this.

If she makes an agreement which is unfair to herself out of ignorance, that it one thing.

If she makes an agreement which is unfair to herself consciously, that is another altogether.

If €50k is a small amount of money to her, let her pay it for peace of mind. I know that I wouldn't do that.

There are a few options here
1) Sell the house - cost to both parties €50k and loss of the cheap tracker mortgage
2) He takes over ownership and the mortgage - she pays €50k - a terrible deal for her and a great deal for him.
3) Continue joint ownership - they rent the house on the open market to a third party. This will be a very profitable investment as it has a cheap tracker. Rental income will pay down the capital, and in time, negative equity will be paid off.
4) Continue joint ownership - they rent the house to him. As above, but a little more complex.
5) And this is a bit of a long shot. Ulster Bank allow people to port their cheap trackers to a new property. Start by asking them if they will allow the house to be sold and both parties to be given separate mortgages on new properties of €150k trackers. That would be the fairest solution, but I doubt if UB would go for it.


But the key point is that the simplistic calculation of €300k - €200k = €100k is not appropriate here.
 
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