I'm asking on behalf of hmy Mum and I wonder if anyone can help me???



My Mum bought her first ever house 5 years ago after renting all her life. It was supposed to be in both hers and her boyfriends name. He messed about with getting wage slips etc so when they went to get the mortgage my Mum ended up getting it in just her name.



Right - here's the thing. They have split up but are still living in the same house and so far this has worked ok, but my Mum has now had enough and wants out She can't afford to keep the house on by herself. She has enquired about selling but the house is in negitive equity and with fees etc she would likely be out of pocket by quite a few thousand pounds if she sold it. She has asked her ex to buy the house from her but he can't afford the deposit to get his own mortgage.



Could she add him to her current mortgage and then further down the line have her name taken off it and he then becomes the owner of the mortgage and house?? Is this even possible??



It's such a shame as she has poured thousands into the house and she just wants to walk away from it. She has even talked about getting the house repossesed to just get rid of it....thank fully I have talked her out of that!!!



If she can't add him to the mortgage is there anything else she could do???



xx

Hiya, she can have him to the mortgage but only if he is creditworthy, so they'll want evidence of earnings etc and to credit score him, but she won't be able to take herself off as she is effectively selling the property, one of the original borrowers must stay on there as in the eyes of the law you could be avoiding stamp duty, fees etc.



TBH if they've split up I wouldn't recommend putting him on. Other options you could consider is to rent a room out if that's possible to help with the bills, or she could move out and rent it out for enough to cover the mortgage until it has gone up in value and she can sell. Or to reduce the monthly payments her lender may let her put a portion of it on to interest only until she sorts herself out, but obviously if she does this, her capital won't reduce down

Thanks for your reply Mandy. It makes good sense that she doesn't add him especially if she can't be taken off at a later date.



I think she is thinking about renting it out but I know she is worried about the responsibility of being a landlord and the rent would have to be quite high to cover the mortgage and she would be worried about finding a tennant and what to do if they dont pay etc.



I feel so sorry for her cos she now feels trapped.



xx

I don't know about the mortgage but there are problems with renting. You need to let the mortgage lender know and they won't always let you. Also there's a limit on how long you can rent it before you have to pay extra tax when selling it. Who is her mortgage with?

maybe if she spoke to the bank they might be able to help her out with reducing the payments if she explains the situation she is in... in the current climate I am sure they would rather try to help someone out than to reposess and sell on as that doesn't really do anyone any favours.



It's a horrible situation to be in I hope she manages to sort it out x

What about changing to a capital and interest mortgage only (if she isnt already). This would reduce her monthly payments by at least a couple of hundred pounds a month.



I know in the current climate most banks are happy to do this x

I have spoken to her and and she is going to speak to the bank (it's Northern Rock I think) and see what her options are, if she can reduce her mortgage then that might give her some breathing space.



Just another question, if he has lived there for 5 years and paying towards bills etc, even though his name is not on the mortgage....does he have any rights over the house...can she ask him to leave??

there's no agreement so no he has no right to the house... luckily for your mum

You'll find that if she declared to the bank he was living there, they would have got him to sign a deed of consent, which is a legal document relinquishing his right to the property, they will get any adult living at the property to sign this as after period of time, you can in fact lay claim to a property.
Northern rock are pretty good at helping people in trouble and will not usually refuse to change to. Buy to let although the interest rate may change. If she is considering renting out she may be better going through an agent who can deal with practicalities. She would need to pay income tax on rent, but this can be offset against the mortgage payments so likelihood is that she won't need to if the mortgage is so high.

I thought with renting you had to have a buy to let mortgage, which often can only be up to a certain % of the property value.

If she has had the mortgage 5yrs then it's probably a good time to renegotiate it anyway. Might be worth getting an independent financial advisor on the case - we did this and got a good deal despite having to pay a fee, it was worth it.

If she can take in a lodger, it's a lot easier - no need for landlords insurance, gas safety certificate, change to mortgage or any of that, plus there's no tax to pay under the rent a room scheme.

If she rented out there would be no income tax but there would be capital gains tax when she came to sell xx

Sorry to contradict you emvar, but that's not strictly true about capital gains as it generally applies to rented properties you've never lived in, if she were to rent it then move in to rented herself until a time when she could move back to sell it, it's unlikely she would pay it. Also with the buy to let mortgages yes they only lend up to a certain loan to value but for existing residential mortgages they look at it individually and from my experience with northern rock, they would normally just charge a fee and keep you on the same product. I wouldn't renegotiate the mortgage until she knows what she wants to do, as if she does then decided to sell up, it's likely she will have to pay hefty exit fees. The first port of call should be northern rock, see what they can do and take it from there x