Housing decisions after Marriage failure
Discussion
Looking for a little bit of advice from the expansive PH knowledge bank.
I've just left my marriage after having been together for 12 years and unfortunately we just drifted apart. No animosity or issues, we still get on very well and hopefully it'll stay that way.
We bought our first and only home together at the back end of 2006. We bought it for £105k and, after a really pants financial advisor advised us to, we took out a 105% mortgage over 35 years. Then the financial meltdown happened and we were a little bit shafted. We're in a position now where we owe about £94k and the house has probably about £8k equity in it.
I'm keen for her to stay in the house, despite everything I still care a lot about what happens to her and I really don't want her ending up in a council flat in some god forsaken sink hole estate. She only earns £20k a year basic so would struggle to get her own mortgage to start afresh but she CAN afford to pay the mortgage and household bills to keep the house on. 1st question is, would it be as simple as transferring the deeds solely to her or is it much more complicated than that?
Now, I'm the one that's walked away, I intend to clear my debts by selling both cars (I pay for both) and then using the equity to buy something cheaper to run. I've also told her that I won't need to be bought out of the house as long as she doesn't lay any claim to my pension. No issues there. Basically she can keep the house and I start over. Now I'm currently living at my Parents' house which is, quite frankly, driving me mental. I need to be out of there asap. I've done the basic maths and once all of the bills are signed over to her I can put approximately £1200-£1300 to one side every time I get paid (4 weekly). But I really can't stay at my parents' for too long for the sake of my own sanity. The next question therefore is, do I buy or rent?
If I rent I can get a decent fully furnished apartment for around £700 pcm. This would enable me to slowly build up and store my own furniture in preparation for eventually buying my own place. Alternatively, do I take out a small loan to gather a suitable deposit quickly and buy my own place? (looking at a new build 3 bed detached with garage for £120k, with a 10% deposit so 90%LTV) This will mean repayments of £454 a month with the payments of the bank loan on top. Still cheaper than renting but no furniture in the short term, advantage being that it's my own place.
Finally, internet searches reveal that even with 90%LTV, some companies are willing to offer interest only at around £200 per month. Could I take this with a view to using the spare cash to furnish the house and then switch to repayment after the 2 year term is done?
I appreciate this is a lot of questioning for one thread but I'm a little bit thick when it comes to stuff like this.
Thanks
I've just left my marriage after having been together for 12 years and unfortunately we just drifted apart. No animosity or issues, we still get on very well and hopefully it'll stay that way.
We bought our first and only home together at the back end of 2006. We bought it for £105k and, after a really pants financial advisor advised us to, we took out a 105% mortgage over 35 years. Then the financial meltdown happened and we were a little bit shafted. We're in a position now where we owe about £94k and the house has probably about £8k equity in it.
I'm keen for her to stay in the house, despite everything I still care a lot about what happens to her and I really don't want her ending up in a council flat in some god forsaken sink hole estate. She only earns £20k a year basic so would struggle to get her own mortgage to start afresh but she CAN afford to pay the mortgage and household bills to keep the house on. 1st question is, would it be as simple as transferring the deeds solely to her or is it much more complicated than that?
Now, I'm the one that's walked away, I intend to clear my debts by selling both cars (I pay for both) and then using the equity to buy something cheaper to run. I've also told her that I won't need to be bought out of the house as long as she doesn't lay any claim to my pension. No issues there. Basically she can keep the house and I start over. Now I'm currently living at my Parents' house which is, quite frankly, driving me mental. I need to be out of there asap. I've done the basic maths and once all of the bills are signed over to her I can put approximately £1200-£1300 to one side every time I get paid (4 weekly). But I really can't stay at my parents' for too long for the sake of my own sanity. The next question therefore is, do I buy or rent?
If I rent I can get a decent fully furnished apartment for around £700 pcm. This would enable me to slowly build up and store my own furniture in preparation for eventually buying my own place. Alternatively, do I take out a small loan to gather a suitable deposit quickly and buy my own place? (looking at a new build 3 bed detached with garage for £120k, with a 10% deposit so 90%LTV) This will mean repayments of £454 a month with the payments of the bank loan on top. Still cheaper than renting but no furniture in the short term, advantage being that it's my own place.
Finally, internet searches reveal that even with 90%LTV, some companies are willing to offer interest only at around £200 per month. Could I take this with a view to using the spare cash to furnish the house and then switch to repayment after the 2 year term is done?
I appreciate this is a lot of questioning for one thread but I'm a little bit thick when it comes to stuff like this.
Thanks
First thing is do you have any children? If not then my advice would be to go see a solicitor and get this all tied up as soon as possible. If you do not do this then you are leaving yourself wide open to her making a claim against you at a later date. I know you don't think this will happen, but trust me there is a good chance once she gets talking to friends and family.
I get the impression that you feel guilty for walking away and that for some reason you need to ensure she has the same standard of living she currently has? You seem to be happy to pay the mortgage on the house and let her live there, will you still be that keen if she moves another man in eventually?
You could sign the entire property over to her, but don't forget your name will still be on the mortgage. If she defaults on the mortgage then the bank are going to start coming after you for the money. You are jointly named on the mortgage and the bank really doesn't care who pays the money.
If the marriage is truely over then you need to get divorced and separate all financial ties from her. This means selling the house and going your separate ways. You will also find it much easier to get a mortgage once you have no financial ties to the other property.
You live with your parents or rent a furnished place until your house is sold and the finances are sorted out. Then you buy your own place and move on.
I get the impression that you feel guilty for walking away and that for some reason you need to ensure she has the same standard of living she currently has? You seem to be happy to pay the mortgage on the house and let her live there, will you still be that keen if she moves another man in eventually?
You could sign the entire property over to her, but don't forget your name will still be on the mortgage. If she defaults on the mortgage then the bank are going to start coming after you for the money. You are jointly named on the mortgage and the bank really doesn't care who pays the money.
If the marriage is truely over then you need to get divorced and separate all financial ties from her. This means selling the house and going your separate ways. You will also find it much easier to get a mortgage once you have no financial ties to the other property.
You live with your parents or rent a furnished place until your house is sold and the finances are sorted out. Then you buy your own place and move on.
Thanks for the reply. Just to clarify, I won't be paying anything towards the house. The bills etc, everything will be getting paid by her. I just need to know if it is as simple as signing over to her or of it's much more complicated, and some sound financial advice on my choices regarding repayment over interest only mortgages or renting.
OP, I'm sure you think it is kind by trying to keep her in the house but to be honest owing £94k on a £20k salary is nuts. Nearly 5 times her single earnings at all time low rates and on a pretty low pay level. If interest rates go up 1 or 2% then what? I fear that you may just be pushing her inevitable default further down the line and then she'd lose the equity too.
focusxr5 said:
Now, I'm the one that's walked away, I intend to clear my debts by selling both cars (I pay for both) and then using the equity to buy something cheaper to run. I've also told her that I won't need to be bought out of the house as long as she doesn't lay any claim to my pension. No issues there.
Finally, internet searches reveal that even with 90%LTV, some companies are willing to offer interest only at around £200 per month.
On the first point, you're coming out of this way better than she is. If she went for a formal financial settlement, she'd get much more than this: half the small equity in the house, half your pension, half your cars, a slice of your salary. Maybe you should be more realistic and head off the very likely divorce settlement that's on the way. Finally, internet searches reveal that even with 90%LTV, some companies are willing to offer interest only at around £200 per month.
On the second point, what lenders are offering interest only? It too me months to find one. They say they do, but their terms are so tough virtually no-one can meet them. For a start they'll want cast iron equity behind the load showing capital that you'll pay back with at the end of the term. No more open ended deals like 2007.
Three quick points;
To be removed from the current property, your ex would need to apply to NRAM for the mortgage you already have, as if it was a new mortgage. On £20k a £94k mortgage is not far off 5x income which sounds tight once you add in bills and even worse if she has any credit commitments. It doesn't matter if the mortgage has been paid for 30 years and you THINK she can afford it, if it doesn't fit and they think removing you increases their risk, they won't let you off the mortgage.
You would not be allowed to take a loan for a house deposit.
No chance of Interest Only at 90%.
To be removed from the current property, your ex would need to apply to NRAM for the mortgage you already have, as if it was a new mortgage. On £20k a £94k mortgage is not far off 5x income which sounds tight once you add in bills and even worse if she has any credit commitments. It doesn't matter if the mortgage has been paid for 30 years and you THINK she can afford it, if it doesn't fit and they think removing you increases their risk, they won't let you off the mortgage.
You would not be allowed to take a loan for a house deposit.
No chance of Interest Only at 90%.
bmwmike said:
Sorry to jump in but wtf? For ever or how does that work ?
[quote]a slice of your salary
[quote]a slice of your salary
Again thanks for the advice. Again, I should clarify, £20k is her basic. She usually clears £27k a year with overtime. I know that's not ideal but makes everything more affordable
As for the comment saying uspskill and earn more. Not exactly helpful input is it?
focusxr5 said:
I have no idea what this means.
Again thanks for the advice. Again, I should clarify, £20k is her basic. She usually clears £27k a year with overtime. I know that's not ideal but makes everything more affordable
As for the comment saying uspskill and earn more. Not exactly helpful input is it?
Sorry, I was referring to the point that someone made... in divorce the wife comes away with a slice of salary. Hence, wtf. And seeking clarification as to how that normally works. Is it forever,etc. Not had a divorce but am married. Again thanks for the advice. Again, I should clarify, £20k is her basic. She usually clears £27k a year with overtime. I know that's not ideal but makes everything more affordable
As for the comment saying uspskill and earn more. Not exactly helpful input is it?
Marriage is a curious contract given that you never get to see the small print when signing.
Stay at your parents save the £1000+ a month I presume by the post and debts you haven't saved a bean in 12 years of marriage. Selling the cars is good in a year or so you will have a decent deposit saved up for a house.
As for your ex she should be doing something similar her taking on the house won't be easy the sums don't stack up. I presume she doesn't have any savings either to knock off the mortgage balance and make the LTV look a bit better?
As for your ex she should be doing something similar her taking on the house won't be easy the sums don't stack up. I presume she doesn't have any savings either to knock off the mortgage balance and make the LTV look a bit better?
bmwmike said:
Sorry, I was referring to the point that someone made... in divorce the wife comes away with a slice of salary.
Not just the wife, but where one partner is substantially lower wage earning, they'd normally be awarded a few years (normally some way in proportion to the length of the marriage) of support to transition their way of living, to which they have become accustomed. Try reading up on Cleese's settlement, fairly public domain although obviously with much bigger numbers. Looking at it from the other angle if you find another lady in the next 6-12 months who happens to live 5,10,50 miles away.... what then?
I would not buy and lock yourself down until you get an idea of where you are going. A few of my friends have ended up splitting and starting fresh in their 30s and its always complex when houses are involved.
I would not buy and lock yourself down until you get an idea of where you are going. A few of my friends have ended up splitting and starting fresh in their 30s and its always complex when houses are involved.
Sorry to hi-jack thread, but I'm in a similar situation basically not married and not together long before she got pregnant child is few months old, she is living at my place which is solely in my name and she has a 1 bed flat she owns and rents out. We are splitting up no bad feeling etc, I love the kid will pay child support etc and be a good dad, but I'm wondering what will happen to my place, even though she has her own place will I be expected to give her money to buy say a 2 bed even though she earn enough herself to afford a 2 bed etc ?
I don't know if this makes any difference but when I re-mortgaged (before we knew she was pregnant) they asked me if anyone over 18 else lived in the house not on the mortgage I said 'Yes' and gave her details, I thought it was for insurance but turns out not she got a legal letter from the mortgage company asking her to sign a form saying 'she had no interest in the property and had taken legal advice blah blah', she signed it and we thought nothing of it.
I don't know if this makes any difference but when I re-mortgaged (before we knew she was pregnant) they asked me if anyone over 18 else lived in the house not on the mortgage I said 'Yes' and gave her details, I thought it was for insurance but turns out not she got a legal letter from the mortgage company asking her to sign a form saying 'she had no interest in the property and had taken legal advice blah blah', she signed it and we thought nothing of it.
trowelhead said:
What is the highest LTV available for interest only at the moment out of interest?
Only one i can find online is 50% LTV...
75% is possible.Only one i can find online is 50% LTV...
LTV isn't the issue though, it's the Repayment Vehicle thats the hardest part to satisfy....you can't just say that you'll over pay every month, or you'll use your annual bonus, an inheritence or that you'll change to repayment at a later date etc.......
It's possible, but only to the right sets of circumstances...
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