Remortgaging - ex has charge on property

wilburpig

Hi,

I am looking to remortgage and just phoned First Direct. They said they don't lend unless they have the first and only charge on the property. After divorcing, my ex owns 17% of the house (40% of the equity at that time), although can't claim it until all children have finished FT education (my youngest is 8).
Is this common? Am I going to be able to remortgage or will I be stuck with my current lender?
Thanks

holly_hobby

ALL mortgage lenders will demand 1st charge on the property - and as the priority of charges are placed in their order of application, your hubby currently has 1st call on the property equity.

Only way round this would be to have his charge deferred to 2nd charge, see a Solicitor - this may involve his charge being removed and re-applied after the lender has their charge registered. But you must check with the lender first, that they are agreeable to the future application of 2nd charges - or he/you may find out that the lender won't allow his registration of a 2nd charge - and he won't be too happy !!

Hope this helps

Holly

wilburpig

Thanks, it might be easier to stay with my current lender. Is LTV relevant? It's 45%, so plenty of equity.

izools

As long as the LTV is under 80% you shouldn't have a problem on that front, you'd get good interest rate offers.

Unfortunately a great LTV won't negate a lenders wish to have first dibs (charge) on the property.

Your current lender should allow you to choose from their portfolio of current mortgage offers though, as long as you don't mind paying the product fee.

taxsaver

It's a simple deed that needs to be signed by your ex in order to postpone his charge in favour of a new lender, so from a technical point of view that shouldn't be an issue. However, I guess it also depends on the kind of relationship that you have with your ex as to whether or not he'll try to make life difficult for you.

holly_hobby

LTV has no relevance on the order of charges - as I say they are applied in date order - so if you remortgage your hubby will automatically escalate from his current 2nd charge status - to 1st charge status.

As I stated if your hubby is happy to defer his charge from 1st to 2nd place (once the charge of your current
lender is removed - which will happen on completion to your new lender i,e anyone other than FD), and the new lender is happy to accept 2nd charges - then you're away !!

If your hubby is agreeable & your new chosen lender is receiptive to this, your conveyencer will sort this all out whilst they are doing the remortgage paperwork - you may not qualify for any fee free remortgage deals that are about though, as they only usually apply to standard and straight forward changes to lender only.

Or ... you could just stay where you are and see what deals your existing lender can offer you .. when compared with what the cost of a remortage inc exit fees from your current lender, and sols costs for
reschedule of charges may cost you, it may be more cost effective to remain where you are.


Hope this helps

Holly

opinions4u

taxsaver wrote: »

It's a simple deed that needs to be signed by your ex in order to postpone his charge in favour of a new lender, so from a technical point of view that shouldn't be an issue.

I think the OP highlighted the main technical issue in the opening post.

They said they don't lend unless they have the first and only charge on the property.

wilburpig

Thank you.

Relationship isn't great and he's based in the USA so paperwork would have to be posted back and forth. He may well make more of an issue of it than it needs to be and I'd rather avoid the hassle.

Santander is my current lender, so I'll see what deals they can offer me. It didn't even occur to me that it would affect the remortgage until I spoke to FD.

holly_hobby

That sounds your best and less stressful option ... good luck ..

Holly