Remove my wife’s name from the BTL mortgage

by Readers Question

9:18 AM, 6th May 2015
About 3 years ago

Remove my wife’s name from the BTL mortgage

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Remove my wife’s name from the BTL mortgage

I’m in a predicament where I’m separating / divorcing from my wife. We jointly own a BTL with a tenant in place. The property has been valued at £105,000 and our outstanding interest only mortgage is £101,500. The rent is £450 per month and the mortgage payment is £190 (we got an excellent base rate tracker with the Bank of Ireland a few years ago). Remove my wife's name from the BTL mortgage

I want to take full ownership of the property and pay her a few quid for her compensation. My question is this:

How easy is it to remove her name from the mortgage, would I need to refinance and would they look at my income (I’m currently not working, but that will be changing soon). I know what the situation is for a house you live in but not sure if its the same for a BTL.

Any help would be great….

Thanks

Derrick



Comments

Mark Alexander

9:24 AM, 6th May 2015
About 3 years ago

Hi Derrick

When I got divorced several years ago it was all done via the collaborative divorce process, whereby a consent order is mutually agreed and provided to the Courts for a decision and formal orders to be made by a Judge.

In our case the Judge made an order which involved mortgage lenders taking my name off some BTL mortgages and my ex-wife's name off others. Lenders complied without any fuss, they did however charge a small fee.

For further details of the collaborative divorce process please see >>> http://www.property118.com/collaborative-divorce-landlords/72399/
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10:33 AM, 6th May 2015
About 3 years ago

I'm in the process of getting divorced as well and we are currently having our 20 properties reviewed by an accountant with a view to splitting them fairly. This will eventually be put into a court order. I had been under the impression that the lenders wouldn't be happy to take either one of us off the mortgage but from what you are saying Mark this shouldn't be a problem? Do they look at earnings at all? I really would like to have a clean break but thought that the beneficial interests would be split but not the legal interests because of the mortgages. If I can have a clean break that would really make my day!

Mark Alexander

10:52 AM, 6th May 2015
About 3 years ago

Reply to the comment left by "Nicola Everden" at "06/05/2015 - 10:33":

Hi Nicola

I do offer a Consultancy service for this and work closely with my clients accountants and solicitors.

There are various factors to consider, not least of which is CGT if you seperated 12 months or more prior to the divorce. Then there is stamp duty on transfers. Accountants and solicitor provide a valuable service but to get it right you also need a property consultant on your team and that's where I fit in. Please see >>> http://www.property118.com/consultancy-mark-alexander/61522/ and read the testimonials. If you would like me to introduce you to other clients who have engaged me to advise them on matters of divorce I will be happy to do so.
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11:07 AM, 6th May 2015
About 3 years ago

Reply to the comment left by "Mark Alexander" at "06/05/2015 - 10:52":

Thanks Mark, I will give it some thought but as you can probably appreciate money is really tight at the moment, with legal fees and accountants fees and not to mention the properties which are all falling into disrepair!

Mike McDonagh

12:30 PM, 6th May 2015
About 3 years ago

Hi, just one note of caution, you may want to rethink if your mortgage is with Mortgage Express as they would use any change as a reason to foreclose.

12:40 PM, 6th May 2015
About 3 years ago

Reply to the comment left by "Mike McDonagh" at "06/05/2015 - 12:30":

We have got at least one mortgage with them so perhaps I'll give them a miss!

Mark Alexander

12:47 PM, 6th May 2015
About 3 years ago

Reply to the comment left by "Nicola Everden" at "06/05/2015 - 11:07":

Hi Nicola

Why are properties falling into disrepair? This is a very dangerous and very slippery slope.

Fees are always a major concern when it comes to divorce and separation. However, for the sake of £995 plus VAT I may well help you to avoid making mistakes that could cost to 10's or 100's of thousand of pounds.

All divorcing landlords can benefit from the service I provide, of that I am certain. Sadly, far too many fail to recognise that when it is far too late. You know where to find me if/when you realise that you need me 😀

Don't look at my fees as an expense, look at them as you would any other investment and consider the risk/return.
.

12:54 PM, 6th May 2015
About 3 years ago

Reply to the comment left by "Mark Alexander" at "06/05/2015 - 12:47":

Mark

We are repairing the properties so not letting them fall into disrepair but it has been never ending recently and it is an aging portfolio so is literally eating up our money along with lawyers, accountants, pensions actuaries etc. I will speak to my husband and let you know.

Mark Alexander

13:11 PM, 6th May 2015
About 3 years ago

Reply to the comment left by "Nicola Everden" at "06/05/2015 - 12:54":

That's what lawyers do, I've seen it so many times when a separation of assets start off as amicable until lawyers get their teeth into a case. It's also the reason I work on a fixed fee basis. I can help you to organise a mutually beneficial settlement deal and to avoid excessive and costly litigation.

There are several strategies that lawyers rarely consider; examples of which are; 1) to leverage equity out of the portfolio and dividing that, 2) changing the balance of the equity/profit share in properties without disturbing mortgage arrangements and/or the title recorded at HM Land Registry.

On what basis are your solicitors acting for you, i.e. is it standard contentious litigation via correspondence or the collaborative law process?
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13:16 PM, 6th May 2015
About 3 years ago

Reply to the comment left by "Mark Alexander" at "06/05/2015 - 13:11":

Mark

My husband and myself decided how we were going to split out assets. The equity is more or less 50 / 50 and so is the income. Because the properties are so different, some have long mortgages, some short, some have equity, some are negative equity we found an accountant who is going to look at the portfolio as a whole and decide on the split. He is also giving CGT advice which is why he is so expensive. I believe the idea is to leave the mortgages and Land Registry as they are and only the beneficial interests will pass. We would then need to co-operate with each other as and when a property needs to be sold. Whilst I don't have a problem with that per se, I'd rather not be exposed should one of my husband's properties be repossessed by a lender. If I could remove my name from the mortgages and the titles I would sleep better at night knowing that I am not responsible for how my husband manages his share.

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