Marriage Seperation => 2nd Mortgage

glennhalstead

Hi Folks,

Me and the Mrs are separating (amicably). I'm planning to buy a house for myself and hence will be getting another mortgage to do this. I'm wondering what advice folks can give.

Should I go to my current lender for another mortgage? I'll probably want to increase the loan on the current house to get a good deposit for the new one.

We owe £95k on the current house and I estimate it's market value at around £215k. I'm looking at circa £110k for the new place.

Thanks for any advice.

Glenn

Cannon_Fodder

If I was your ex, I wouldn't want to jointly re-mortgage "my" home to fund your own place. Because you could then disappear and I'd be left jointly and severally liable, perhaps with an income that couldn't cover the payments, leading to repossession.

However amicable, you need to start cutting your financial ties, not increasing them.

One day, one of you will find someone new and want your own mortgage (either singly or newly joint). Trying to unravel two joint mortgages with your ex is only going to complicate that process.

Better, imo, for you to agree the settlement of your financial affairs. The big one being the house, of course.

There are set ways, perhaps best to speak to a solicitor to make sure it covers all the bases.

But roughly, if you have £120k equity, you should aim around £60k to go with you. Adjusted should she get access to part of your pension or other assets etc.

So, that means your ex needs to remortgage to a single basis, and to a point that frees up that much equity to hand over to you, say a £155k mortgage. Leaves her with £60k equity. Probably not as cut and dried as that, different ways to calculate it, but as an example.

You'd presumably pay some maintenance, that covers half the original mortgage, as her ending up with such a big mortgage isn't quite right. Or there could be an adjustment to the lump sum to simplify things.

It is not going to provide you as much for a deposit, but doing it as a single mortgage will be tougher on the affordability/income test, and even that might not be possible. Depends on her income/credit history etc.

glennhalstead

Thanks for your reply Cannon Fodder, it's given me something to think about.