Buyout Denied- But I already have my mortgage with them?

J

jeny

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Hi all,

My and partner split month ago, I want to buy him out ( no money changing hands) in order to do this he is going to pay off the top up loan and I was going to take over the mortgage. I got notification from the bank today that they would pretty much not even condsider the application. ( Loan 2 Value / Mortgage was based on 2 salaries first time round etc) Which I understand..

But is there anything else I can do about this? I am not on as good money as I was when i took out the mortgage, But i CAN repay it!!!!! But I refuse to repay a full mortgage with my Ex name on it when he is entitled to claim 50% of the house bank in the end!

What else can I do to get his name off the deeds!

I dont understand why a bank would force me into selling a house I will loose money on or defaulting on my the mortgage is Ex leave the counrty ( Likely as per my belief) .

What is the huge issue with allowing me to take it over repay it over a slightely longer term!

Has anyone any ideas on what I can do here to get his out of my life but keep my family home?
 
From the banks' point of view it is understandable. Why would they want to give up the security of having two names on the mortgage for just one... you are transferring more risk to them.

Leaving the bank out of it for the moment, I believe a 'side-letter' can be written in conjuction with a solicitor. This would be a contract whereby the other party gives up his / her right to the ownership of the property, in exchange that you relieve him of his obligations for the remaining mortgage.

One other point to consider is a potential stamp duty implication. You are buying-out the other party and this may be viewed as a 2nd purchase... in which case you would have to pay stamp on the additional principle.
 
Try asking the bank will they allow him come off title only, but stay on the mortgage account.

If still no go, then there are a few things to look at (like Deeds of trust etc - but not totally secure and effective)

Main thing is to do something now, as firstly you are still talking and he is willing, and secondly there may be stamp duty, gift tax and CGT implications down the line.

Get to a solicitor!!
 
Hi, I dont think there would be gift or cgt in this instance as the mortgage I would get in return for his piece of the house would be of equal value. Also re the Stamp Duty I had posted this on the offset and as I was a FTB in the first place and the house is onlt 238k in value and quite small I think that I am exempt from in on transfer.

Does anyone know more about this transfer where he is on the mortgage but not on the deeds? ?
 
Hi Jeny

On your own salary, you do not meet their mortgage requirements. So they cannot lend you the money. You can call into see them and ask the reason for the refusal. Did a broker get you the mortgage in the first place? Ask them to intervene on your behalf. If you don't get a good explanation, then you can go to someone more senior and ask them. It's unlikely, but it's worth a try.

Assuming that they still refuse, you have two options as I see it.

Can you ask a family member to go guarantor on the mortgage?

The last option is to try to find a friend who will buy your ex's half of the house. There may well be someone you know who wants to buy a house but can't afford one on their own.

Brendan
 
Jeni

Would you consider letting out rooms under the rent a room scheme? A portion of this income may increase your borrowing capacity (not sure if it would be enough) but worth a try. Combined with a longer term the bank may be willing to negotiate.
 
Hi, I told the bank I was renting a room etc! Nothing seemed to help I have been informed they are pretty much not open to lending right now, so unless i earned 200k had 200k saved and wanted a mortgage of 10k They dont give 2 hoots.

I am going to apply with a few other banks, Its Highly unlikely I am going to get anything but I am going to have to try andyway I really dont want to loose my Home. Its a terrible situation when I have worked so hard and just because Partner walked out I have to loose my home aswell as everything else.

I just hoped there would be some other way I could do it to get him from the mortgage.
 
Jeni, feel really awful for your predicament as I went through an identical situation a couple of months ago but thankfully in the end managed to pursuade mortgage company (in my case KBC) to allow me to transfer the mortgage to my name. I put a case in writing proving that I had kept up the mortgage repayments in their entirety by myself for two years and that really I was the "safer bet" in terms of ability to repay. How long have you been paying the mortgage alone? It may be that you need to build a track record say for a year and then go for it again. I definitely would not give up.
 
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