Mortgage and Separation

T

TomOB

Guest
I am trying to negotiate a deed of separation with my wife. She lives in the family home, now worth around €600K, with our kids (they stay with me in my rented apt 2 - 3 days/ week.) My wife has a good job but I earn more than her. She cannot afford to take over the mortgage (of around €500) herself, the bank won't allow it. I want to buy another house myself but it is proving difficult to get a mortgage. Her solicitor is proposing that I transfer all of the interest in the house to her, but I stay on the mortgage. As part of the deed, she agrees to be responsible for all of the mortgage payments and agrees that the house will be sold if the mortgage cannot be paid in the furute. It seems that I would be left with the full liability of the mortgage, but none of the benefit. I'm pretty sure I would be legally still liable for the full repayments if she defaults. Does anyone have any experience of this scenario? I am also wondering if I could be treated as a first time buyer for Stamp Duty purposes, if I am losing all my interest in the house? Also will the bank allow me to transfer all legal interest in the house to her and stay on the mortgage? I would be v. grateful for any advice as my solicitor seems not to know too much about the mortgage/ financial side.
 
the answer is yes you would be jointly and severally liable for the entire debt, the bank does not want you off and therefore there is little point in surrendering the deeds to her
it would depend on whther you have equity in the marital home to be leverage to supprt a second mortgage that might assist you

transferring the legal interest does not help because you still owe the money int he final analysis sorry the news is not better
 
So you don't think her proposed agreement in the Deed to be solely responsible for the repayments is worth a whole lot? There is some equity in the house, but when I went to ask about a second mortgage to another bank they seemed only interested in assessing my monthly income and liabilities.
 
Hi Tom,
About your first time buyer question yes you will be treated as a FTB if there is a deed of separation and you transfer over all interest. But you need to make sure you are doing the best thing for yourself so the solicitor you retain should be experienced in separations and the property implications. I would recommend asking your solicitor if he is not knowledgable enough on the mortgage / financial separation aspects as well as the legal ones that he recommend a solicitor who is.
 
But can I transfer the whole interest whilst staying on the mortgage? I think the sol is very experienced, not sure why he hasn't come across this type of proposal before. He wouldn't be an expert on mortgages. I am thinking of seeking advice from an Independent Financial Advisor.
 
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