Mortgages & Marital Separation

Little_RAY

I'm separating from my husband - it's amicable & mutual so no major areas of quibble in a financial sense.

Would appreciate some advice on following:

1. Do I/should I tell Mortgage company that we are separating? If so, when should we tell them? We are currently still living together in the same house for financial reasons, but we consider ourselves separated.

2. At some point we will want to live completely separately (well I want to now!), but this depends on selling the house or coming up with another solution. We are roughly a year away from the completion of our fixed term Mortgage (Jan 31st 2011) with Northern Rock. If we sell before this time we will have to pay a hefty repayment charge.

It would be sensible to wait a year to avoid this payment and also to see if house prices improve... but meanwhile we are still in the house together and I need to get out for reasons of sanity! It would not be healthy for us to continue to live together for this time. The house is not big enough!

If we could get a reasonable amount for our house, then it could cover this fee, but then we have HIPS to pay for and estate agent fees. It is all getting very expensive, and I don't want to make any decisions that could make matters worse.

Any advice would be gratefully received! Thanks.

Let_Us_See

The only question you have asked is whether you should tell the mortgage company?

This is down to you as it will not make any difference whatsoever to the mortgage or the terms of the loan. All the lender is interested in is if your monthly payment will be maintained.

Remember only the lender can release you from your mortgage commitment.

Batchy

a hefty early repayment charge might be less than if we have round 2 of a house price crash.

sup to you... but good luck

Gorgeous_George

It is a long time to live together when you don't want to. You need to look at the options.

Option 1 - Sell now
How much is outstanding on the mortgage?
What is the early repayment penalty?
How much is the house likely to sell for?
HIPS fee = £500 ish
Legal fees = £1,000 ish

How much is left to split with your husband? If it is a negative number you will both need loans but if it is a positive number, all the better.

Option 2 - Sell after ERP is removed
How much will be outstanding on the mortgage in 2011?
How much is the house likely to sell for?
HIPS fee = £500 ish
Legal fees = £1,000 ish

How much will be left to split with your husband? If it is a negative number you will both need loans but if it is a positive number, all the better.

Option 3 - One of you buys the other out
Is it possible? Would the lender allow the sole owner to have a mortgage?

Which option to choose?
What price do you place on your own sanity?
House prices could fall/stay the same/rise between now and 2011
One or both of you will find a new partner (if not already). Will one of you prefer to buy out the other?
Do you want to gamble on the housing market between now and 2011.


I hope that there are no kids involved.

GG

Anastasia

My bank doesn't know that my OH moved out 2 years ago and we are now divorced. We still own the house jointly.

Little_RAY

Thanks all...

No kids involved Gorgeous George, don't worry! Just a dog, and she's coming with me!

We've decided not tell Mortgage Company anything until we sell the house and we have to.

Got some advice today from our friendly local Estate Agent (we bought the house from him, so know how proactive his company is at selling houses). I just have to worry about HIPs, estate agent fees, solicitor fees, and deciding when to put house on Market. We've been advised that it might be better to wait until after Xmas to sell house. We're in no hurry, and it is worth a bit of bother to wait for the best offer on our house.

Any advice on good websites to find out more about the HIP?? Have been told that you can get them cheaper via a website, but have also been warned about hidden solicitor fees... scary!