I bought a house with my partner in 2007. We broke up in 2011. He stopped paying in 2012 as he has no interest of the house. He had a letter signed by him and witnessed by approved government bodies where he now lives saying that he hadn't paid since 2012 and has no interest of the house and would love his name removed from mortgage.
However, I talked to the bank and they won’t let me to take on the full mortgage myself as I do not earn enough, even though I can prove that I paid the mortgage in full all by myself for the last five years.
My ex-partner is thinking moving back to Ireland and wants to buy a house. He asked me “what’s the story?”
I have been looking for information everywhere on the internet over the last few years. However, I still can’t find the answer. I have spoken to two different solicitors but still didn’t have any result yet.
Ms F.T., email
This is a very difficult position for both of you – and frustrating. You both want to move on with your lives. You are both in agreement between yourselves about the real ownership of the house. And yet you are stuck in this limbo.
And the bad news is that, as far as I am aware, there are no easy options for you and your former partner. However, there is one thing you could try.
The position of the bank is clear – and, to be fair to it, not unreasonable. They have made a loan to you as a couple based on your financial circumstances at the time. They have the security of knowing that you are both liable if anything goes wrong with the loan.
They are also constrained by the Central Bank. There are fairly strict rules about how much they can lend to a person, depending on the person’s earnings and also on how much of the value of the house the loan is for.
In your case, it is the first point that is of interest. The general rule is that your loan cannot exceed 3½ times your income. It is possible for the bank to make exceptions: it can increase the loan-to-income ratio, depending on ability to pay in a limited number of cases. Brokers suggest some very secure buyers might qualify for a loan to income of up to 4½ times.
However, the Central Bank expressed its concern even here recently because it reduced the number of exceptions that banks can make.
I am not even sure that your earnings would be enough in such circumstances as you don’t go into those details.
However, to persuade a bank that already has strong security on a loan to accept what it would see as a more risky situation by allowing you now to change the loan into your own name is most unlikely. This is a contract and banks are not in the position of weakening their contract position. And, as I say, this is not unreasonable.
As your bank has said they will not accept a transfer of the mortgage into your name only on the basis that they do not feel you have sufficient earnings to justify that level of loan – even though you have been paying the mortgage yourself for five years – what you need to do is buy yourself out of the loan.
Now, obviously I am not suggesting you have the money simply to pay everything back now. What you need to do is talk to other lenders and see if they are prepared to grant you a mortgage to buy out the current loan. A broker might be useful in this exercise as they are more familiar in how to present cases for clients.
As you say, you have evidence of your ability to pay the loan yourself over the past five years and, presumably, bank statements to show you can do this while continuing to support yourself financially. While your current bank has no interest in weaker security, a new lender is looking at securing new business from you and might be more open to the prospect – given your strong personal financial record.
The only other way I can see to resolve the situation is for your former partner to work with you to pay off this loan by securing additional financing. It is in his interest also as, with his name on this mortgage, it is most unlikely that any Irish lender will consider lending him more for another home.
In this regard, his letter saying he has abandoned his payment obligations to this mortgage since 2012 will actually work against him.
