Separation and joint responsibility for house

[Sylvester3]

Hi All, I have a rather sad tale to tell. I moved here a few years ago with my wife as she wanted to go to university, and I was able to get a job that supported us both while she did that. After she had completed, with my full and unhesitating support, a primary degree and a masters qualification she decided to return to England to take a PGCE. I was a little unhappy about this, but I wanted her to reach her goals and I continued to support her, sending money over on a monthly basis whilst she availed of student loans, hardship funds etc.

During our time here we bought a house just as the market was sliding. The property had slipped from 315,000 at the height of the market and we thought ourselves lucky to purchase it at 267,000. We didn't mind when the slide continued as we loved the house and it wasn't meant to be an investment. We are joint owners.

My wife has recently, very recently, told me she does not plan on coming back and wants to split up. There was no fault on either side, she just felt that she didn't love me as much as I loved her. As heartbroken as I am, I am trying to see the financial consequences of all this. We have no children, which makes things a little less complicated, but the house is going to remain with us for quite some time. A comparable house is on the market for 205,000, and our mortgage sat at 250,000 back in Jan 2011, so likely over 50k neg equity. We thankfully have a tracker at ECB + 0.9% (from First Active, now Ulster Bank) which I will hold onto come hell or high water.

I can manage the payments for the house without difficulty for the foreseeable future as I have a niche IT job which has always given me a good salary (currently 60k), but I don't know what responsibility and or rights my wife has. I have undertaken to continue sending over £400 (around €460) a month to help clear a CC we were both responsible for. I know she will have no problem at all in finding a teaching job in England (prob on £21k).

I hope this is clear. I am currently going through a pretty bad time, but people keep asking me "What about your house!?", so I thought I might as well focus on that.

 

[brokegirl]

Hi Sylvester3,

Sorry for what your going through. I know how tough this situation is.

I cannot tell you exactly what your wifes' responsibility is but as joint owner and your wife she could insist on a share of the house forcing you to buy her out or sell the house.

It sounds like you two ended amicably but I would urge you to consult a solicitor to find out your exact position in relation to your and your wifes entitlements regarding your seperation.

All the best

 

[Thirsty]

she could insist on a share of the house

Only if she can show she has made provision towards the mortgage/upkeep of the property and it doesn't sound like that.

If she is resident in the UK, she can apply for a divorce there, it would be quicker than having to wait 4 years here. You've no children, which in one way makes life a lot easier.

If you've no pension, savings or other assets and all you have to settle is the family home, then you should be able to square that away between you.

The only issue you might have is remortgaging to get the property into your sole name; you certainly won't be able to hold on to your tracker in that case.

 

[Greta]

The only issue you might have is remortgaging to get the property into your sole name; you certainly won't be able to hold on to your tracker in that case.

Not necessarily, there were threads here from people who managed to transfer the mortgage into the sole name and to hold on to their tracker. The main things for OP are to consult the solicitor and to qualify for the mortgage on his own.

 

[Bronte]

but as joint owner and your wife she could insist on a share of the house forcing you to buy her out or sell the house.

What share of the house, it's a share of debt.

Sylvester3 it's a sad tale and luckily you have no kids and can afford the mortgage. But can you persuade the bank this. You need to get the bank's agreement on the tranfer to you. Also you need to ask your wife, who has no money or assets if she is willing to do the transfer. If the bank agrees then you need to hire a solicitor.

 

[Sylvester3]

Thank you for your replys, everyone. I think I now have some idea of the problems and pitfalls which I might encounter. I put this question here as the house will be in Neg equity for quite some time, which means we are stuck with a very heavy shackle holding us together.

Does anyone know if there are consequences by divorcing whilst still maintaining a jointly owned asset? Will the bank need to be informed of the change of status, forcing a remortgage to take place? It may be muddled thinking on my part, but if there are dire financial consequences in moving it to one name, it may prove easier to leave it in both our names until it one day sells and split the proceeds amicably between us. That may not sound the fairest solution for me personally, but I would be willing to take that route if it meant I could still shoulder the burden comfortably.

I was thinking of engaging a UK solicitor at some point as we were married in the UK and she is living there now.

 

[Thirsty]

people who managed to transfer the mortgage into the sole name and to hold on to their tracker

Fair enough - I would have thought banks would do anything to get people off trackers.

 

[Thirsty]

Sylvester3 - I think what you are proposing would be a major mistake. Either sell it or transfer it into one name; otherwise you could have a millstone round your neck for a very long time.

 

[Sylvester3]

I'm not sure I understand, Thirsty:

1. If I sell it I will have to get the bank to allow it and to agree to giving me a personal loan of >50k.

2. If I transfer it into my name I give the bank the opportunity to force a remortgage. I would be unlikely to meet the requirements of such a mortgage as a singleton with a LTV of 125%. I would also lose my tracker in such a case.

In both those cases I have a big millstone around my neck anyway. If I leave us both as joint owners, nothing changes and I can continue to pay it down at attractive rates. As long as there is nothing illegal and/or fraudulent about having my (to be) ex-wife on the deeds, this would seem to be a more appealing option, even if I am liable to share any future gains with her.

Please let me know if you see a better option.

 

[Thirsty]

All I can do is give you the benefit of my own experience and either of the first two options would be my choice.

Greta has suggested that you might be able to keep your tracker - do a search and see if you can find any of the posters she refers to.

 

[wbbs]

If you would not qualify for the mortgage under present criteria then the bank will not allow second name be removed so that will not be an option.

 

[Sylvester3]

I don't know if I would qualify or not, I just doubt that anyone would give a mortgage for 125% LTV (based on the asking price of the same style house down the street).

Thanks everyone for your advice. I'm still at the early stages of the whole process here, but at least I have some things to think about. I am the upset party here at the moment - my wife has left me, but otherwise things are civil between us, which is why I'm trying to determine if I can let things stand rather than start a laborious and expensive process which may leave me worse off. It all depends on whether I can trust her to play fair.

I know others in a similar situation are far worse off than me, so thank you for your consideration on the matter.

 

[dubinamerica]

Hi Sylvester3, I am at the start of what I expect is going to be a strained legal separation. I am currently living in the family home. From looking on other sites there may be an option to have your spouse sign a deed of waiver, thus removing their name from the deeds, but it stays on the mortgage, and you will undertake to pay the loan. I have not gone down this road myself but am trying to find information on this, but this option may be of benefit to you as well. Best of luck. I must admit I admire you outlook and common sense approach and that you want to deal with things amicably. I wish you the best.

 

[Sylvester3]

I have a follow up question to this query. I am planning on moving back to England late next year to start a PhD, so my salary is going to be very much reduced for at least 4 years, even if I take on part time work etc. I will not be returning to Ireland, and in fact intend to migrate to Canada as the Biotech industry is huge there.

I was planning on renting out the property here in Ireland for a few years until I can offload it when the mortgage remaining equals or is less than the property's value. The bank told me unofficially that they would leave it on the ECB + 0.9 tracker if I did that (I have nothing in writing yet).

I have investigated with a local estate agent and I have found out that rental incomes are about €700. My current mortage is about €930 and the TRS stands at about €111, therefore Im going to have to find at least €350 in excess of this a month to cover the shortfall (I will split the costs with my soon to be ex-wife I hope). There are obviously other costs involved such as maintenance, NPPR tax and the new taxes which are coming along. There is also no guarantee that I would have it let all the time, although that doesn't seem as big an issue where I am.

I am therefore reconsidering if this is a wise choice? If I was going to stay here I would keep managing the property, but renting it out seems like a very expensive risk and might not have any benefit in the long run. Would it make hard nosed sense for my personal finances to tell the bank I'm leaving the country, please let me sell the property and turn the excess into a loan at the same terms, which I will split with the ex? I think if I was to get rid of the property in this way I would probably be left with a 50-60k shortfall. Oh and I have no intention of going bankrupt in the UK by the way.

Please let me know what you think is the wisest choice!

Syl