Mortgages and divorce

ADC_3

My friend and his wife are separating. He has agreed to pay her a certain amount to take over sole ownership of the property and continue paying the mortgage. When he went to his lender they said they would only lend further money against the house if both parties signed up for the second advance. Is this barmy or what. The 2 people involved both want to split up and get on with their lives but the lender seems to want to link them. The figures involved are a 100k shared mortgage which my friend wants to turn into a 120K one person mortgage.

Any thoughts?

Mortgageman

It does sound odd - and I suspect it's because of a breakdown in comunications - your friend should try and talk to the lender again, or consider using a mortgage broker who will understand the ins and outs of the transaction.

Your friend should be aware that there will be a cost associated with the additional legal work that this process will require - I suspect in the region of £300

HTH

MM

hairy_cornflake_2

It sounds like you will need to remortgage - and carry out a transfer of equity (change everything into one name).

However, this is only possible assuming the person taking over the mortgage has sufficient income, credit history etc etc - You will also need to consider if there are any penalties in coming away from the current lender and the costs involved in switching lender (however there are plenty of lenders who will bear most of the costs)

I am a little surprised the lender was unable to help - I would tell your friend to contact the head office to discuss to see if you get a different story .. if not

My advice would be to speak to an independent mortgage broker who can guide you friend(s) through the options

bunking_off

Agree with the earlier posters...it certainly should be possible and could be down to a communications breakdown.

My brother is currently going through a similar process, and the issue he hit is that the lender wouldn't initiate any of the paperwork on changing the mortgage (in his case moving to a better rate) until all of the paperwork to take his ex-partner off the deeds/mortgage had been completed.  

It could well be that the OP's friend's lender is saying that they can't increase the mortgage from 100k to 120k without consent of all parties on the account.  Given his ex is still on there at present, it also needs her signature.  Once she's off it, it won't.  The problems start if either;

a) removing her from the scene breaks the lender's criteria of size of loan versus the OP's friend's individual income, or

b) the OP's friend actually needs the advance in order to pay off his ex.  She can't get the payment until the OP's friend can get the additional cash advance, but he can't apply until she's off the account (which she won't agree to until she receives her share).  Nasty catch-22 so I hope that's not the case.

Robert_Sterling_3

It is by no means obvious to me that if two people together can afford a £100,000 mortgage then one of the two persons on their own can afford the £100,000 mortgage let alone that one of the two can afford a £120,000 mortgage.