Divorced Spouse Back in House

Discussion in 'Mortgage arrears & negative equity case studies' started by TRAY79, 14 Feb 2019.

  1. SBarrett

    SBarrett Frequent Poster

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    This.

    From what I am reading, the wife seems to be concerned about the husband making money on the property in the future. What she is neglecting to look at is that he is taking on more debt than the house is actually worth, a debt he is relieving her of. As RedOnion said, is she going to write a cheque to her ex husband for taking on all the debt?

    He could pay rent himself. So the half payable to him goes to the bank as a mortgage repayment, with no income tax liability to himself. The other half is paid to the ex wife as rent. She forwards it on to the bank to cover her half of the mortgage. She has to declare it as income and pay tax on it.

    She will also still be liable to the full value of the debt on the property and be unable to get another mortgage herself so she can move on.

    The current arrangement of him paying the mortgage is cheaper for her and him taking her off the mortgage means she can move on.

    From a financial point of view, I can't see why she would hold on (from an emotional point of view, there are many!)

    Edit: There is also a risk that he may be worse off in the future too, especially if he is effectively buying the house at a higher price than it is worth. If she wants a share of future gains, she will also have to share of future losses. Is she willing to do this?

    Steven
    www.bluewaterfp.ie
     
  2. TRAY79

    TRAY79 New Member

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    S Barrett - It looks very unlikely now that the banks will agree to take name off mortgage, New Partner on social welfare so her name cannot be added and his salary is too low for bank to put it into his name.

    The current arrangement is cheaper for both of them not just her.

    Under the current arrangement it is hard for both of them to move on.

    My question about future gains assumed the house and mortgage stayed in joint names now.
     
  3. RETIRED2017

    RETIRED2017 Frequent Poster

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    Last edited: 18 Feb 2019
    What agreement was entered into when the got Divorced I am sure there is some agreement / arrangement in place,
    If the wait twenty years until house is no longer in negative equity they may not get mortgage,

    It can get messy you are never fully Divorced under Irish law as you can see the sooner they get rid/sell house the better ,

    I suspect they will sit down and sort it out among themselves if left to it,

    one suggestion would be for both to overpay mortgage and get it out of negative equity and then sell,

    Another suggestion bank may agree to sell now and come to an agreement to pay off short fall over a set time frame,

    If they leave it for twenty years both could finish up not being able to get a mortgage,
     
    Last edited: 18 Feb 2019
  4. TRAY79

    TRAY79 New Member

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    Retired2017 - Thank you.

    She wanted to sell off house and to both pay off their share of negative equity but he was unwilling to do this. He is happy with current arrangement because the amount he is paying off the mortgage is less than what he would have to pay for rent in area.

    I guess she just has to wait and see.
     
  5. SBarrett

    SBarrett Frequent Poster

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    If she still owns the house and is still liable for the debt on it, she will be entitled to any future value. She really should be talking to her solicitor about it and getting something drawn up. If he is paying all the mortgage, he could claim for more than 50% in the future as he has been servicing the debt. Separation can be very messy and it's best she gets advice from experienced professionals rather than getting unqualified opinions online.


    Steven
    www.bluewaterfp.ie
     
  6. RETIRED2017

    RETIRED2017 Frequent Poster

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    I am sure they came to some arrangement about house when they got Divorced ,
    The only advice I would give her is to save up a lump sum to cover her share of the negative equity she may already have a lump sum in place ,