Joint mortgage, repossession and separation who is liable for what? -
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Joint Mortgage: Do I owe half?

Joint mortgage, repossession and separation who is liable for what?

With the return to little or no growth in house prices, the spectre of negative equity is very much a reality for many regions in the UK in 2012. This of course makes little difference to the majority of householders that either have no plans to move house or release equity from their property.

However, people with a joint mortgage and plan to sell their property which is in negative equity, the situation can be very different indeed.

When the property is sold, any outstanding balance due is jointly liable by both parties.

This in effect means that if one person cannot afford to pay their half of the shortfall the lender will pursue the other owner for the entire amount. This can have serious consequences for people who cannot afford to make up the shortfall.

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Divorce and Mortgage Debt

Divorce and separation are often connected with houses being sold or repossessed making it an extremely stressful time for the people involved. Many jobs forbid their employees entering solutions such as bankruptcy, sequestration, IVA's and trust deeds, further complicating a difficult situation.

With this in mind it is worthwhile exploring every option available before putting your property up for sale.

It may for instance, be better to let the property or rent out a spare room in order to balance your finances. The price for handing back the keys to your home can have far reaching effects for one or both parties.

It is always recommended to speak with your lender as soon as possible if your circumstances have changed. This would also apply if you were to let out your property as you would require the lenders consent before forming an agreement.

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