split from partner and remortgage needed - HELP!

robolina

I am hoping someone may be able to give me some pointers in the right direction....
My partner and I have split. He wants to be released from the existing fixed rate interest only mortgage with RBS which has one yr remaining before reverting to SVR. We have borrowed over 90% of property value.

I wish to stay in the property and parent has offered to assist in any way possible - should I try and do a change of title on the existing mortgage first, seeing if it's possible to have a parent take on half the mortgage, and then remortgage at a later date, or should I just go straight in for the remortgage first? To add to the worries, since getting the original mortgage I have moved from a permanent job, to a contracted job - will this also impact?

Very confused about what to do - any advice greatly appreciated.

Thanks

JimmyTheWig

If you are on a fixed rate then you will be charged significantly to remortgage.
I would guess that if you remortgaged now you will get a worse rate than the one you currently have.
Mortgages are harder to come by now. House prices have dropped so where you were on 90% you would probably now be on 100%. Unless you (or parent) have a decent stash of cash to reduce the loan you probably wouldn't get accepted at all.

So, anything you can do to keep the existing mortgage is worth a try.
I have no idea, to be honest, if you can change the names whilst keeping the same product.

dimbo61

He may want to be released but he cant simple as that.
If you can afford 1/2 the mortgage payments inform him he needs to pay the other half.
You are jointly liable for paying the mortgage and his credit score would be destroyed if he stops paying his 1/2 of the mortgage.
Try and keep your existing deal and contact a solictor.
Good Luck

beecher

As it is an interest only mortgage you're likely to be in significant negative equity. Surely your ex should be paying half of this negative equity? I doubt if you're in a position to remortgage at all, so could well be looking at SVR payments next year. I think you need to get professional advice on this - selling up might be the best option all round.

ALIBOBSY

Agree with beecher, house is likely to be in negative equity. Tell ex if he wants to walk away he will have to stump up half the neg equity to be released. Perhaps you could both keep the mortgage as is both paying half but rent out the house or take in lodgers to help cover the cost. Only other option is to sell up, taking a hit on mortgage charges and negative equity which you will need to split between you.
Have you spoken to the lender yet?

good luck

ali x

robolina

thanks for all the advice so far, I have considered taking a lodger in the interim, and the split is amicable and my partner continues to pay his half of the mortgage until we can sort something else out....
I should imagine that we are definitely currently in negative equity, so is it best to try and get a parent on the current mortgage (RBS happy to do change of title under existing mortgage agreement, subject to normal lending checks on parent) and then wait it out till the end of the fixed rate and try for a remortgage then?

beecher

You're not going to be able to remortgage if you're in negative equity though. You need to have a plan as to how you'll get to 90% LTV if you want to remortgage, and also need a repayment vehicle of some kind. Is your parent happy to be on the mortgage long term or are you planning on taking the whole mortgage on yourself?

robolina

Thanks Beecher,
My parent is prepared to be on the mortgage long term, as an investment as well as to assist me. There is a possibility we can raise some funds over the next 12 months, but I am concerned that even if we do this, are we likely to be able to get a mortgage together after this if my parent is approaching retirement age? (i.e will salary be the only thing taken into consideration or will capital be considered?).....I also don't want to go through the whole change of title and financial hardship for 12 months if ultimately I will have to sell anyway......really feel trapped and don't want to make a mistake.......

dimbo61

Lots of things to take into account here that we dont know !
Could you afford the mortgage on your own ?
Do you want to stay in this property and wait until the market improves ?
could the bank of mum & dad put in a good ( deposit ) lump sum to reduce mortgage to say 75% LTV? Or pay 50% of mortgage each month for 50% equity.
Will your EX also pay you some money to get off the mortgage ( negative equity )
Where will you live if you sell at a loss ( more debts )
Does the property need lots of expensive work / expensive to run GAS,ELEC,COUNCIL TAX etc
Only you know the answer GOOD LUCK

feisty1

You havent said how old yr parents are, RBS criteria:The mortgage can't go beyond the applicant's retirement date (and they can't have a mortgage past the age of 70).