A Scam Destroyed My Credit Score: Can I Put Our Mortgage In My Wife’s Name? DAVID HOLINGWORTH ANSWERS

I bought my apartment several years ago. I live with my wife and our children, but the property was purchased solely in my name.

I took out a new mortgage about two years ago to free up some equity.

Unfortunately, I recently fell victim to a scammer. They convinced me to send them money with the promise that it would be invested, and told me that I could get a good return. I ended up losing everything and ruining my credit rating.

I feel stupid and have let my wife and children down.

I am still paying the mortgage and have not defaulted. However, I am concerned that my poor credit score will prevent me from taking out a new mortgage on a new fixed deal in the future, and we could end up with a high interest rate.

In view of these problems, I want to transfer the flat in my wife’s name.

Is this something the lender would take into account and what should I look out for?

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David Hollingworth replies: This is a stark reminder of how many financial scams exist, and how easy it can be to get sucked in by their promise to grow wealth quickly.

Too often, these schemes can be outright scams or carry extreme risks that are not properly highlighted.

Either way, you shouldn’t feel stupid and you certainly won’t be the last person affected by this.

If you have been a victim of fraud, you will find a lot of useful information on the Action Fraud website that can help you and emphasize that you are not alone.

Lenders may allow capital to be raised through refinancing, although they will question what the extra money will be used for.

While something like home improvement will be acceptable to lenders, purposes such as financing a business or investment may not be as widely accepted.

You may not have intended to put that money into the plan at the time, but it sounds like what was involved quickly ate up the money.

That may then have affected your credit rating as you chased losses and then fell behind on other loans.

Can you keep up with mortgage payments?

The better news is that you’ve managed to keep up with mortgage payments, so your payment information remains intact with the lender.

For the remortgage, you had to demonstrate that you could afford the mortgage based on your income and expenses, which hopefully would have stood you in good stead.

Hopefully you can keep that up and manage your overall debt, but if you’re struggling to meet mortgage payments it’s important to talk to your lender as soon as possible.

They will look at options that can help you manage the mortgage and prevent you from getting into bigger problems. Please note that repossession is a last resort for the lender.

If you can keep up with mortgage payments, there are likely to still be standard rate options available on a comparable basis with your existing lender when the current deal expires.

Switching to a new lender would require a full affordability assessment and if your credit file is damaged a more specialist lender will likely be required.

> How to remortgage your home: your guide to finding the best deal

Transfer mortgage to your partner

If you transfer the flat into your wife’s name, you would essentially be ‘selling’ the property to her.

You need to think carefully about what you hope to achieve from this, as well as how you can do it.

Legal advice for both of you would be helpful, and be aware that there may be a stamp duty charge on land tax.

Lenders may consider lending in one name if the partner lives in the home, but they may wonder why a married couple is not a co-owner.

They may also have issues with the previous owner remaining in the property, due to the rights that may come with that.

If the reason is to avoid a reduced credit rating on the mortgage, they may well refuse to proceed.

If you and your wife are already financially connected, for example through a joint bank account, this will become apparent when looking for credit.

The lender may take a closer look at your credit position as part of the assessment process.

It is possible to transfer the property at a favorable value rather than full market value, but your wife will likely have to assume at least the existing mortgage.

She would have to meet a lender’s affordability assessment based on her income and other obligations.

I think you and your wife should focus on your overall position and consider how best to manage mortgage and other debt obligations.

Debt counselors can help you understand your options and how you can get a grip on the situation.

That will hopefully help you get things back on track as quickly as possible, which will improve your situation in the longer term.

It should also help clarify the right approach when it comes to the property.