Mortgage terms

AllyS

Hi

Sorry one more question, this mortgage process is a minefield

We have been accepted for another re-mortgage at even better rate than with C&G, but the terms are that I have to pay off a loan that I have with my ex husband. We have been split up for 2 years and have a loan on tracker rate so are paying hardly any interest so have left it in joint names, my half is £6,000. Now obviously I would prefer to not have to pay off his part of the loan as amicable as things are at the moment, never know what might happen in the future.

Our financial advisor has said that we can say it is our intention to pay off the debt and then not bother, she says that this happens all the time. Does anyone know if this correct?

I have spoken to Citizen Advice but they said this question was too far out of their remit. I have sought advice with another professional off the record and they have said that once we have the money from the mortgage company it is our money and we can do with it what we wish. Is this correct too?

I have asked ex to take over the loan in his name, because in my mind he pays me maintenance, so has guarantee that I will pay my half of the loan but will not agree to it.

Can anyone give any further advice on this? We both normally play things by the book that this is actually quite a risk for us and a little reassurance or our rights on this matter would be really nice.

Thanks
Ax

kingstreet

Were they told the loan would be paid off, or do you not reach the mortgage level you want with it left in place?

Normally, lenders will include a clause requesting a loan be paid off for one of two reasons;-

- it is stated on the application it will be repaid
- affordability is tight and the desired amount cannot be offered without a reduction in outstanding commitments.

Ask them what they will offer you if the loan remains in place and consider if the difference means you're better off keeping it, or paying it off.

AllyS

kingstreet wrote: »

Were they told the loan would be paid off, or do you not reach the mortgage level you want with it left in place?

Normally, lenders will include a clause requesting a loan be paid off for one of two reasons;-

- it is stated on the application it will be repaid
- affordability is tight and the desired amount cannot be offered without a reduction in outstanding commitments.

Ask them what they will offer you if the loan remains in place and consider if the difference means you're better off keeping it, or paying it off.

The mortgage is at early stages at the moment. We have only been accepted on a credit check. I have asked my financial advisor about what they will loan on a mortgage with the loan still in place.

Thanks
A x

AllyS

kingstreet wrote: »

Were they told the loan would be paid off, or do you not reach the mortgage level you want with it left in place?

Normally, lenders will include a clause requesting a loan be paid off for one of two reasons;-

- it is stated on the application it will be repaid
- affordability is tight and the desired amount cannot be offered without a reduction in outstanding commitments.

Ask them what they will offer you if the loan remains in place and consider if the difference means you're better off keeping it, or paying it off.

Ok this is the response that I have received:

Only lend £56,970 with loan in place. Otherwise will loan £75,000, although we are only borrowing £72,000. Previous mortgage is £51,000.

On the application form she is stated that the balance of the outstanding credit committments and then a total of what will be paid.

Reason for committments is I have a CC with £1,000 on it which will be paid off in full when I move regardless, as I have some monies owed to me.

Hope this helps
Ax

kingstreet

Are you using your own solicitor, or a firm the C&G is paying for under a free/cheap legals deal?

It's possible the money will simply be released to the solicitor and you'll be allowed to pay off the loan informally. However, it wouldn't be the first time I've thought that would happen then I've had a call from the solicitor asking for the account number as they've been asked to repay it at completion, to ensure it's done.

What's the extra £20k (51k to 72k less the 1k C/C) for, if you don't mind me asking?

AllyS

kingstreet wrote: »

Are you using your own solicitor, or a firm the C&G is paying for under a free/cheap legals deal?

It's possible the money will simply be released to the solicitor and you'll be allowed to pay off the loan informally. However, it wouldn't be the first time I've thought that would happen then I've had a call from the solicitor asking for the account number as they've been asked to repay it at completion, to ensure it's done.

What's the extra £20k (51k to 72k less the 1k C/C) for, if you don't mind me asking?

Yup we have our own solicitor, if the bank does ask for the money owing do I have to pay off the entire balace of loan outstanding or just my half? as that is what we have an issue with.

We have to do some renovations to my boyfriends house to fit us all in, that is going to cost £15,000 the rest was a buffer/contingency fund that we were going to pay back if we didn't use, as we can pay £7,500 per year back without incurring charges. I am paying the credit card off out of my own money not the mortgage money

Thanks again
Ax

kingstreet

AllyS wrote: »

Yup we have our own solicitor, if the bank does ask for the money owing do I have to pay off the entire balace of loan outstanding or just my half? as that is what we have an issue with.

We have to do some renovations to my boyfriends house to fit us all in, that is going to cost £15,000 the rest was a buffer/contingency fund that we were going to pay back if we didn't use, as we can pay £7,500 per year back without incurring charges. I am paying the credit card off out of my own money not the mortgage money

Thanks again
Ax

You're jointly and severally liable for the whole loan, so you'd have to pay it all off. Only other idea is to settle with your ex by giving him half and asking him to take out a new loan in his name alone.

AllyS

kingstreet wrote: »

You're jointly and severally liable for the whole loan, so you'd have to pay it all off. Only other idea is to settle with your ex by giving him half and asking him to take out a new loan in his name alone.

He can't won't do this, thanks tho for all the advice it is much appreciated.

I am not sure either of us are happy to proceed with the mortgage with the stated terms, too much risk, so will have to come up with another plan

Ax