Mortgage issue

westie666

Hope someone can help with this slighly sensitive issue...

My mum and dad divorced 3 years ago, and until now mum has given dad the money topay the mortgage every month.

But my dad is looking to buy a villa in spain soon and wants to be free of this mortgage (joint mortgage). Also part of the agreement is for mum to pay dad ~10%of value of house @ 2003 price.

There is around £35k still to pay over ~14 years. Mums income is less than the tax man can take (about £4700 per year, self employed childminder) and her partner is declaired bankrupt.

What can my mum do to apply for a mortgage for the above money, ancan she include partners income for 'other income' each month??

Any advise will be thanked.

Westie666

homer_j_3

The types of income that can be accepted vary from lender to lender.

On face value, it sounds as though on her own income alone she may struggle to borrow the amount she needs, although without knowing the full ins and outs, it really is impossible to provide an answer that you will be confident in.

The best thing she can do is get herself to a whole of market broker and let them get all the facts to see if there is anything out there. If there is plenty of equity in the house then she may be OK.

MortgageMamma

HI westie.

Forget the financial advice for now your mum needs to seea solicitor to check her legal situation and also the best way to go around this. If you take financial advice now she could make a costly mistake, and its best to take baby steps with these situations. you can find a local solicitor in your area at http://www.lawsociety.org.uk. Some solicitors will do the first appointment free, however your mum will probably get legal assistance anyway. make sure she goes with a pen and pad full of questions to get as much info as possible from solicitor on that first appointment!

Ian_W

I'm with MortgageMamma on this one westie. Presumably she had a solicitor when they divorced so I think she needs advice on the agreement reached at that time as to whether your dad can force the issue simply because he wants a villa in Spain.
I presume also from your post that your mum still lives in the house but your dad is responsible for the mortgage to which she contributes? On the face of it your mum is in a worse financial position than your dad and may well struggle to get a mortgage in her own right.
You probably don't want to take sides but before looking at how, she needs to consider whether she needs to take this action under the agreement made at the time of the divorce.

herbiesjp

Ian_W wrote:

I'm with MortgageMamma on this one westie. Presumably she had a solicitor when they divorced so I think she needs advice on the agreement reached at that time as to whether your dad can force the issue simply because he wants a villa in Spain.
I presume also from your post that your mum still lives in the house but your dad is responsible for the mortgage to which she contributes? On the face of it your mum is in a worse financial position than your dad and may well struggle to get a mortgage in her own right.
You probably don't want to take sides but before looking at how, she needs to consider whether she needs to take this action under the agreement made at the time of the divorce.

Agreed - First look into the legal aspects of the scenario and make sure you explain the situation very clearly to the legal representatives. On this basis they will then advise you what would be your best legal course of action.

There may well be options on the mortgage front, but I doubt that your mother earns enough to have the mortgage in her own name alone.


HTH and good luck

homer_j_3

The impression I got from the OP was that the divorce took place 3 years ago, she remains in the property, he does not. She pays him a set amount per month and he tops up the rest to fulfill the mortgage payment.

Clearly if this arrangement was part of the settlement then yes she should be checking with her solicitor to ensure that the figures stack up with the settlement agreements.

However, if she agrees and knows that the figures are correct then I believe that if she is wanting to buy out the property and is financially able to do so with all of her income and not that is derived from pure employment then why not seek mortgage advice?

Her partner is a declared bankrupt and there will be this to consider. I think that if she knows the score with the settlement and teh figures check out OK, then seeing a mortgage adviser should be the course of action.

If she is not wanting to take the responsibility of a mortgage etc then yes seek legal advice to see what will happen but I am guessing that the home will need to be sold and she then becomes in a worse situation of losing the home and looking for another one or possibly renting.

Ian_W

I'm sorry homer I have got to disagree. Westie's mum needs a mortgage at 7x earnings like she needs a hole in the head.

I don't know if lenders will allow her partners income to count but AFAIK a bankrupt can't be on the mortgage. Ergo if the music stops playing between them, mum's gonna be the one without a chair holding a mortgage she can't afford.

Now they've both very clearly gone their own ways a renegotiation of the agreement might well be due and could work in her favour. We don't the value of the house or property values where they live but it may well be possible, if she's agreeable, to sell the family home and with the equity buy somewhere mortgage free.

homer_j_3

Yes I agree that 7 x mortgage is a big no no, especially when there seems to be very little income from her in particular.

I did say that on face value, she would struggle but one thing that I have found doing this jobs is that only having snippets of information can completely make the situation seem a whole lot different to what it actually is.

Legal advice should be taken with regards to the details of the divorce settlement and conditions.

Decisions on whether she can get and/or afford a mortgage should be sought through seeking mortgage advice and the completion of a fact find etc.

I dont think we are disagreeing on anything here Ian, I was just purely pointing out the difference in roles and that it is important to get professional advice on every aspect to this.

westie666

Just to give a bit more info...

Mum pays full amount for mortgage per month. the arrangement made is that my dad gets 10% of the value of house price of 2003 (~£90,000) House now worth £120,000

Also mum is a self employed childminder and earns ~£12,000 per year (~£4700 after deductions for electric, council tax etc etc) Dont know if adviser would take top level figure as income, or income after outgoings (electric, council tax etc) so either £4700 or £12,000. A big difference....

Any more advise greatly welcomed!

W666

Joe_Bloggs

I have a relative who is a fully qualified, registered, inspected, self employed child minder. A significant proportion of expenses can be claimed back as tax relief. She runs it as a small, part time business with full accounts. There may be remortgaging issues, if part of the house is used for business purposes, perhaps even council tax issues.
Perhaps get in contact with your local Citizens Advice Bureau first.
J_B.

silvercar

westie666 wrote:

But my dad is looking to buy a villa in spain soon and wants to be free of this mortgage (joint mortgage).

Sounds to me like its your Dad that needs to get advice. He wants to vary the agreed divorce terms to suit his future plans. Unless he can come up with a plan that your Mum finds acceptable and the mortgage company agree with, he may find that he can't just walk away from this mortgage.