Large Mortgage and now single parent, advise please

skintmummy

Hello,

I have just become a single parent and need some advice.

I have taken over the payments of the mortgage and the mortgage is £171k on interest only, we also have a secured loan on the house with about £25k left to pay.

How does it work if I wanted to sell the house and get a cheaper one, this is in regards to the secured loan, can I carry this to the new house ? or would I need to pay it off with the proceeds of the sell. I think the house may only be worth £185k and I would like to get a house for about £155k, something smaller and cheaper to run for me and my son.

Any advice you can give I would much appreciate, it is early days even though we have been seperated for 6 months but need to work out my options.

Thanks x

Plans_all_plans

Have you seen a solicitor? Is the house in joint names?

skintmummy

Not yet and yes its in both names, so we need to remove ex oh from the mortgage the secured loan is it joint names as well and he is continuing to pay half of this.

Plans_all_plans

I've just realised I assumed you were married, is this the case? If so, then I really think you should see a solicitor ASAP and dont agree to anything until you have seen one. I'm not sure whether a solicitor is needed for unmarried couples who are splitting, but more knowledgable people will be along shortly to advise.

CloudCuckooLand

Has your lender agreed to you taking over the mortgage? If not asked yet, is your income sufficient to take it on, on your own? i.e. mortgage of about 4x income, as a rough guide.

Loan will reduce the affordability calculation though. How much effect, varies by lender.

skintmummy

I have not told the mortgage company yet have just been paying the payments from my account.

I earn £25k so no the mortgage is to high really for my single wage, but an managing it only interest only but the rates can only go up which scares me.

I am married, we are currently seperated on good (at the moment) trying to work out a way out of this mess, would like to keep the house but with the mortgage, secured loan and a total of £1k of unsured debts of my own dont hold out much hope I can make it really.

CloudCuckooLand

I'm sorry but I don't think you can afford the downsize £155k property on that income. Not with those debts still to deal with.

I doubt a lender will agree to take his name off.

With the debts you will be stuck for lenders anyway. Think you need to ask your current lender for a figure they think you can borrow.

And see if any houses are around at that figure.

As you say rates can only go one way. Think you need to sell, try to pocket the £14k, maybe use it to keep the secured loan people happy, then start again...

RAS

With your sole income and mortgage level, no mortgage provider is going to allow your ex to be removed from the mortgage.

You will not be allowed to sell the house unless you can repay both the mortgage and secured laon, and you would be strongly advised to take advice as to what sort of martgage you could get in your own name, probably no more than £100K tops.

puddy

as an example, we have a mortgage of about 62k or 66 including the redemption penalty if we want to move. last year i phoned to enquire about borrowing a bit more for the kitchen. my partners income at the time was about 25k its normally 22k as he was acting up at the time. because my work is self employed, we discussed with the woman on the phone (sharkleys) that they would disregard my income as its not guaranteed and i dont have 3 years accounts yet.

so far, so good i thought, we have equity of over 50%, even 3x my partners income was about 75k at the time and i have borrowed about 5x in the past on the same mortgage (when it was mine alone) and she said we could borrow up to about 100k

she then said that based on affordability criteria which had changed enormously, we couldnt afford to borrow anymore. we have the normal outgoings, nothing extreme. at the time we had no massive debt, although have since bought a sofa, v expensive and we shouldnt have done it, but anyway, the point is, OP, you need to get your head round the fact that the lending rules have changed beyond belief, we cannot rely any longer on just phoning up and borrowing a bit more like we used to.

im afraid your income will enable you to borrow around the 70k mark, give or take with benefits or whathaveyou

skintmummy

Thanks for your help and advice I think at the moment best to ride it out and see what position I am in in the next 6 months, and during that time try and pay as much off as I can of the unsecured debt.

Jowo_2

skintmummy wrote: »

Thanks for your help and advice I think at the moment best to ride it out and see what position I am in in the next 6 months, and during that time try and pay as much off as I can of the unsecured debt.

Go to the Debt Free wanabee board - they will tell you some options on how to manage the debt and reduce living costs.