Help from mum??

cutemum

Have recently separated from my husband and have been left in a little bit of a financial pickle. I have been left financially responsible for all the bills & debts. I can just about manage the mortgage & priority debts but would not be able to manage the debts which could nearly cost £1000 per month. I have been speaking to Payplan and have been advised to send token payments for the next 6 months or until things settle. I should be entitled to about £230 child support from my husband. I will be getting a slight payrise in September. I know I will be able to make cut backs in several areas. I have been unsure of how I am going to get out of this as home is in negative equity. Today I was speaking to financial advisor who suggested that my mum could release some equity from her home (which is owned outright) so I could pay off my debts and pay her the money for this mortgage over a period of 10-15 years. This would allow me to keep the house until prices rise, keep my credit rate up to enable me to get a mortgage later. Does this sound sensible?? Is there anyway I can get my husband's name off mortgage and unable to claim a share later- he is not going to pay anything.

Sorry this is so long. In a real dilema!!!:mad:

NGlady

I dont really know much about this but the first thing you'll be asked to do is produce a SOA - theres "sticky" at the top of this thread with the hows. Basically it covers all areas that you may be spending money and people offer advise on where you can cut things out, or offer suggestions

tigtag02

The only way to get your husband's name off the mortgage is to remortgage. Would he be happy to do this for no settlement? Would you be offered a mortgage on your own?

cutemum

Thanks for your replies. I really need to know if I & my mum are sensible for thinking about her releasing equity to pay off my debts or if it is too much to ask of her.

sulkisu

cutemum wrote: »

Thanks for your replies. I really need to know if I & my mum are sensible for thinking about her releasing equity to pay off my debts or if it is too much to ask of her.

My initial reaction is to say this is a bad idea, but it's hard to say without knowing all of the facts. For example, how much is your debt, how much is your mothers house worth, how old is your mum and what is her financial position (is she working or retired), does she have an income, does she have a pension etc? The problem with borrowing money against her property, is that if you aree unable to pay it, for whatever reason (illness, unemployment, redundancy, death), she is stuck. There may be equity in her house now but that could change - the economy is still pretty unstable and house prices could fall. House prices may not rise, your husband might not pay child support (e.g what if he loses his job), really anything could happen. As bad and stressed out as you feel at the moment, I suspect that you will feel ten time worse if your financial woes end up being transferred to your mother.
Why not contact one of the many debt advice organisations such as CCCS or the CAB - they will be able to advise you on a range of options for managing your debt.

Edit: Any advice should include making your husband financial responsible for his share of the debts.

cutemum

Thanks sulkisu. My mother is widowed and owns her house outright. It is hard to say how much it is is worth in this climate- probably £160000-£185000. She is 54 and is working & gets pensions from my dad's work. I never thought about if I get sick. I would hate for her to end up being responsible for my debt. As for my husband he seems totally oblivious to debts. He just ignores them. I am worried how his attitude will affect me. What if he does not pay his CC or loans that are in his name- will it have an impact on me or can I separate from him financially??

zzzLazyDaisy

First, I am sorry that you have found yourself in this situation and I hope things work out for you.

Personally I would not mortgage my house to lend money to my son under any circumstance, as it would be putting my home at risk, but that may not be the same for your mum, maybe she has enough money to meet the repayments even if you can't afford it yourself.

Really, only you and your mum can decide if this is too much to ask of her. But some of the things to think about are:

How old is she - most equity release schemes are only available to the over 60's. They often also have onerous conditions and the small print needs reading very carefully, and advice taken, before entering into one of these schemes.

If she is under 60, she will need to take a mortgage, so she needs to have enough earnings to satisfy the lenders lending criteria

You say that you can only just manage your own mortgage - what would happen if, say, you were made redundant or had your hours cut, or had an accident and went off sick? Would you still be able to pay her mortgage as well as meeting your other bills? If not can she afford to pay the mortgage?

To be honest my view is that it would be better for you (and your mum) if you deal with your debts yourself. For example, can you take a lodger just to get you over this initial period? Have you made a CSA claim, are you entitled to tax credits (put your details into entitledto.com to check).

What seems like a quick fix could result in your mum losing her home if it goes wrong, so you do really need to cover every eventuality.

Good luck

Daisy

EDIT - cross posted with your post above. Any debts in his sole name are his alone in contract law, but this can get muddied in divorce proceedings. Have you seen a solicitor? Have you made a will? Remember if you are still married and you die without making a will, everything will go to your ex, not your child.

Spirit_2

cutemum wrote: »

home is in negative equity. .

Sorry this is so long. In a real dilema!!!:mad:

• You are concerned that your ex will get a share of the negative equity? He should pay his share of it.

• Your mum would need to remortgage to lend you the money.
• Your mum is 54 and working.
• Who would pay her mortgage payments?

This does not sound a realistic plan, and has the potential to bring your mum into your money worries whilst your ex walks away. If your mum has savings and offers you a loan - maybe it is more workeable without such a risk to her.

If you post an SOA you may get more advice/suggestions that helps to assess the affordability of your plans.