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Old 6th Nov 2018, 18:04
  #10 (permalink)  
Join Date: Jan 2008
Location: Hotel Sheets, Downtown Plunketville
Age: 72
Posts: 687
Originally Posted by charliegolf View Post
My daughter is at home with us separated- looks like divorce. They have 2 properties, the 'home' and an investment flat in liverpool. Both are joint mortgages. The home is up for sale, and will go at some point. Probably!

The Liverpool pad, one bed, 8th floor of a noughties tower block in Cheapside, was bought on an interest only mortgage and is in negative equity (100K vs 138k mortgage). The neg equiity means they cannot transfer it to a repayment mortgage without a 38k cash injection. So they are told.

The question. Can he, 'give' the flat to her, so that she can work to get it on a repayment (he has no disposable income, she does) and start paying down the debt? She thinks he would agree, since both would like rid of it, IF it can be done. She can certainly afford to service the debt.

As it stands, both will be hit (again) with the 2nd home stamp duty thing. Another reason we think he's agree.


Before the question may be answered the following needs to be clarified:
"they have two properties", "both are on joint mortgages". Confirmation that they own the properties jointly.
Is there any equity in the principal residence.
"Give" the flat ? Presumably by this it is meant he is to transfer his interest to her. But his interest is a negative figure of 19000, that would mean she is giving him 19,000. What then is she receiving in agreeing to taking on such a liability.
The starting point in the division of matrimonial assets is for each party to take out that which they have contributed, what is in their ownership and then considering how to divide the remainder.
In so far as not being able to transfer the mortage to a repayment type is concerned, the reason is clearly that no sane and sensible lender will lend 138,000 on a property that`s worth 100,000.
All that seems clear is that it will be hard to find a lender who is willing to fund the finacial damage of a divorce. An application to Mum and Dad Bank seems to be the only course of action.
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