Divorce, Clean break & Mortgage Advice

[eightseventhree]

Hi there,

In August last year i got divorced. I then started to sort out the clean break stuff which has taken some time due to one thing or another.

I applied last month to take my Ex off the Mortgage with my current lender (Santander) and provided proof of income etc. . .

They replied last week declining the application to take the Ex off unless i pay £8,000 off the mortgage.

I gave them a call as there was no real explanation on the letter.

They said that they were happy with the income that i have to be able to support the mortgage but they were concerned about the Loan To Value of the property (purchased 2008 with 10% deposit) and that is why they are wanting the extra cash (which i don't have)

Could any of the finance or legal people give any advice as i am wanting to sort this clean break with my ex and take on the house by myself (she wants no equity. . . . guilty mind i think so)

Other than selling the house which i believe i can more than cover the mortgage i don't see any way of getting her off it without sinking more cash into the property which A) i cant and B) i am reluctant to do as i will be most likely looking to sell within the next few years any way.

Thanks

[SO27]

Are you able to switch your mortgage to another bank without penalties? Then Santander get all their money back and you have a new mortgage in just your name.

[Sarnie]

What is the current value of the property and mortgage balance?

[eightseventhree]

Mortgage balance is 137k and value is about 145k.

Im not locked into any mortgage currently sat on the lenders SVR

[Sarnie]

eightseventhree said:

Mortgage balance is 137k and value is about 145k.

Im not locked into any mortgage currently sat on the lenders SVR

You have mail

[eightseventhree]

anonymous said:

[redacted]

I understand this, What i was more interested in (which i should have really made more clear) was that i cant take off my ex due to having to take out a new mortgage . . is there any way around this as in legal docs that i can put in place etc so i can complete my clean break

[eightseventhree]

I understand about risk etc, but i even discussed with the bank about putting my current partner onto the mortgage in place of my ex who has far greater earnings than my ex has but this would still result with having to pay the 8k as it was a LTV issue not an earnings issue.

The other option is to sell up and walk away covering the mortgage, then start saving again in rented


edit to add the car is a company funded car so selling is not an option!

[johnfm]

Banks being awkward fvckwits non-shocka.

Yes, they'd like more security.

Yes, they'd like £8k paying into the account.

OP doesn't haven't.

OP hasn't defaulted on payments.

Banks wasting everybody's time yet again.*

• not their fault per se. I expect they have quite a few Basel II risk hoops to jump through.

[eightseventhree]

anonymous said:

[redacted]

Yep that about sums up my research so far!

The adding of the G/F onto the mortgage was more to test the water regarding this issue. And yes thats the reason i want her off ASAP and to complete the clean break . . and there is always a lotto win that she could then grab 1/2 of!

anonymous said:

[redacted]

I completely understand why they are doing it . . . hell if i was in there position i would do the same!

My parents have offered to lend the cash but i would rather sell, walk away with a clean slate (if possible) than sink cash into a house that was mine and hers . . . if that makes sense!

Edited by eightseventhree on Wednesday 28th March 11:28

[JonRB]

It very much depends on the lender. To get my ex off my mortgage, Barclays / Woolwich want me to do a completely new mortgage application and redeem the old mortgage using the funds from the new one.
This seems somewhat short-sighted of them as it means that if I'm going to consider a brand new mortgage application it may as well be with a competitor as with them.

But as tonker says, I can see that the lender would want some kind of assurance that the sole partner has the income to support the mortgage. In my case the original mortgage was calculated and advanced solely on my income, which makes it all the more silly but rules are rules.

eightseventhree said:

I understand this, What i was more interested in (which i should have really made more clear) was that i cant take off my ex due to having to take out a new mortgage . . is there any way around this as in legal docs that i can put in place etc so i can complete my clean break

I'm in the exact same position and the best we have been able to do is draw up a Deed of Trust that states that I own 100% interest, liability and responsibility on my property (and the joint mortgage on it) and she has the same on hers (we had two properties at the time of divorce and decided to have one each, with a cash adjustment for their relative worth).

It's not as clean as getting her name off the mortgage but it's the next best thing given the circumstances.

eightseventhree said:

and there is always a lotto win that she could then grab 1/2 of!

If you have a Consent Order in place that declares a clean break with no further rights then she would not benefit from that. If you have not yet got a Consent Order stating that, then yes, she could.

My Consent Order states that each of us has no interest in the other's property and there is a Clean Break in force. And that each of us will periodically try to get the other off our mortgage and until then the other will enter into a Deed of Trust (as mentioned above). These have now been signed but really only strengthen the wording in the Consent Order.

Edited by JonRB on Wednesday 28th March 11:31

[eightseventhree]

JonRB said:

It's not as clean as getting her name off the mortgage but it's the next best thing given the circumstances.

Edited by JonRB on Wednesday 28th March 11:28

Is she still on the deeds to the property that you have 100% liability to?

[JonRB]

eightseventhree said:

Is she still on the deeds to the property that you have 100% liability to?

Yes, she is, but the Deed of Trust is filed with the Land Registry so there is documentary evidence of the true ownership status.

Edit: I should say "will be" as I am meeting my Conveyancer tomorrow to counter-sign the Deeds of Trust and get Certified Copies made.

[gjf764]

I'd fight this (and did in a similar situation a couple of years ago). Try the formal complaint route, if nothing else to get an explanation of the rationale behind the decision although I think the subsequent posters have this about right.
I'm pretty sure that they'll have assessed you for a brand new mortgage with their current criteria which is why they came up with the 8k figure.
Try offering them the keys back (not in writing!) and see if that makes them change their mind.
Good luck

[Stevemr]

If income is good, and LTV is the issue, which is my understanding, can you borrow the £8000 on an unsecured loan over 5 years the repayment will be around £160 a month? Then you are sorted!

[Welshbeef]

One thing I don't understand is your comment that you don't want to sink £8k into the property as you nay not get it back?
Now I think you are confusing the value of the property instead of te value of the debt.
The bank has asked for £8k to reduce the debt resulting in a 90%LTV.

If you sold your house now for less than the mortgage let's say £8k less so the funds don't cover the mortgage um you still owe the bank £8k. Now if you did the same sold it but had paid in £8k you would owe nothing as the funds would clear the mortgage. Hence no difference.
You cannot control Market value you con the debt.


You have had an offer of a loan of £8k from your parents. Personally I'd take this as it gets you the clean break now and title deeds only in your name and mortgage only in your name problem solved.

One thing to consider though. You have met a new partner (rather quickly) and seem to suggest putting her on the mortgage seems your moving the game on very quickly. Could be a superb option or then again not.
If your serious about putting her on it then she can chip in £8k would look like similar deposits by both parties then and go for tenants in common pay 50% each of the mortgage job done.


Another thing to consider is your current wife could force your hand as she may want to buy a house but clearly cannot with her name on your mortgage so would demand her name removal. That may not be her plan today but who knows when that may change.
I'd rather be in control ester than st a decision forced upon you with little time to have options.

Or sell the house.

Z4 as a comp car.... I don't know of Manu companies offering such cars in the car list nor may I add that to an employee who would buy a sub £150k property a few years ago. They are mid £30's car which generally goes with a £85k plus salary in which case £8k isn't a lot of money.

[eightseventhree]

Welshbeef said:

One thing I don't understand is your comment that you don't want to sink £8k into the property as you nay not get it back?
Now I think you are confusing the value of the property instead of te value of the debt.
The bank has asked for £8k to reduce the debt resulting in a 90%LTV.

If you sold your house now for less than the mortgage let's say £8k less so the funds don't cover the mortgage um you still owe the bank £8k. Now if you did the same sold it but had paid in £8k you would owe nothing as the funds would clear the mortgage. Hence no difference.
You cannot control Market value you con the debt.

You have had an offer of a loan of £8k from your parents. Personally I'd take this as it gets you the clean break now and title deeds only in your name and mortgage only in your name problem solved.

I understand that they are wanting to minimise risk and as i said i would be the same if it were my cash that i had lent out. The parents option will always be there so thats the backup plan!

Welshbeef said:

One thing to consider though. You have met a new partner (rather quickly) and seem to suggest putting her on the mortgage seems your moving the game on very quickly. Could be a superb option or then again not.
If your serious about putting her on it then she can chip in £8k would look like similar deposits by both parties then and go for tenants in common pay 50% each of the mortgage job done.

Without going into the ins and outs of my private life we had been split 12 months before we filed for divorce with one thing and another so has not been as quick as you think! (nearly 2 years separated 9 months divorced)

I don't want to put her and she doesn't want to go on the mortgage we just asked to test the water to see if it was a income related issue.

Welshbeef said:

Another thing to consider is your current wife could force your hand as she may want to buy a house but clearly cannot with her name on your mortgage so would demand her name removal. That may not be her plan today but who knows when that may change.
I'd rather be in control ester than st a decision forced upon you with little time to have options.

Or sell the house.

As i said we have been divorced over 9 months so not current wife. We both just want to get on with out lives so quicker the better. If it needs me to lend off the parents then so be it . . if sell, then again that's what will have to happen.

Welshbeef said:

Z4 as a comp car.... I don't know of Manu companies offering such cars in the car list nor may I add that to an employee who would buy a sub £150k property a few years ago. They are mid £30's car which generally goes with a £85k plus salary in which case £8k isn't a lot of money.

Not company car, good allowance with good lease not 1/2 way through yet so cant hand back! The purchase of the house looking back was not the best move but thats what the situation is!

Im glad we only borrowed a fraction of what they had offered us and not got greedy as i guess a lot of people did

Cheers for spending the time to write a good and frank reply

[AyBee]

Not a great situation to be in but I can only see two options:
- Borrow from the parents and stay in the house; or
- Sell, take back your £8k (assuming you sell at market value which is unlikely) and move on from there, although with more strict mortgage requirements, it could take you a while to get back onto the ladder.

I'd probably be picking option 1 assuming that I knew my parents could spare the money and the comparison of costs to rent vs. mortgage repayments.

[Welshbeef]

AyBee said:

Not a great situation to be in but I can only see two options:
- Borrow from the parents and stay in the house; or
- Sell, take back your £8k (assuming you sell at market value which is unlikely) and move on from there, although with more strict mortgage requirements, it could take you a while to get back onto the ladder.

I'd probably be picking option 1 assuming that I knew my parents could spare the money and the comparison of costs to rent vs. mortgage repayments.

Remember by borrowing the money from your parents v selling

You dont have a new mortgage arrangement fee c£1k
You dont have convayencing costs c£300
You dont have Stamp duty costs £1.5k
You dont have the 1-2% estate agent selling fees c£1.5-3k
You may not be offered the same mortgage deal as you are remortgaging rather than a new buyer.

So lend £8k vs the lost stamp duty the lost convayencing fees and the forthcoming estate agent fees. Of course you will then have all the new buying costs.
Frankly add that lot up together and £8k is really a good deal - suck it up. It may seem unreasonable but when you stratch the surface and consider what you have already paid/are due to lose and/or will have to pay again it makes it a pretty clear decision.

Hold onto it for another 5 years or so mortgage will be less which is good but the house market may be higher its unlikley to be lower at that point you will have made the £8k back.


Unless of course you hate the house think of her all the time etc that said your with another lady there now without issue so guess its not a problem.

[eightseventhree]

anonymous said:

[redacted]

Tonker, I far from borrowed to the max when I perchased the house. By my calculations at the time of purchase it was 1.89 our combined salary which correct me if i am nieve, in the grand scheme of house purchases is not that great. Seeing as the bank offered us 4x our joint income which would have been crazy/suicidal!

By myself only 35% ish of my base salary after tax without car allowance and any bonus on top is the cost of the mortgage, and bonus has been used to over pay where possible.

Would you class this as reckless?

I try and save every month which mostly got eroded with costs of divorce. I have started to save again and build up that safety net going forward.

Edited by eightseventhree on Thursday 29th March 16:37

Edited by eightseventhree on Thursday 29th March 16:39

[AyBee]

eightseventhree said:

anonymous said:

[redacted]

Tonker, I far from borrowed to the max when I perchased the house. By my calculations at the time of purchase it was 1.89 our combined salary which correct me if i am nieve, in the grand scheme of house purchases is not that great. Seeing as the bank offered us 4x our joint income which would have been crazy/suicidal!

By myself only 35% ish of my base salary after tax without car allowance and any bonus on top is the cost of the mortgage, and bonus has been used to over pay where possible.

Would you class this as reckless?

I try and save every month which mostly got eroded with costs of divorce. I have started to save again and build up that safety net going forward.

If the above is true, what are your reservations about borrowing the money (either from parents or bank loan) in order to meet the requests of the bank? It sounds like you will easily be able to pay them back in a matter of months!