Mortgages and benefits. Continuing a mortgage following a breakup.

Kramoose

Hi there,

I have a friend who is separating from her fiance. They have 2 kids. They share a mortgage. She works 30 hours per week, 6 days a week around school times which brings in around 650 pounds. All parties want the mom and kids to stay in their current home. We believe that from her wages, maintenance from her ex and the benefits she will get as a single parent, she would be able to afford to continue living there and paying the mortgage which is the ideal scenario for all.

Can anyone advise on the legality of this i.e. paying mortgage payments with benefits. I understand that you cannot set out with a mortgage in this way but with the addition of a guarantor (her father) could she not carry on with the mortgage as it is in the interest of the kids.

Advice greatly received.

Mark

kingstreet

The mortgage isn't going to change because they've split up. One party will continue to live in the property. The other won't, but both are jointly and severally liable for the mortgage payments.

At some point, they may wish to transfer the property and mortgage into one name but the lender will not permit that until the person taking on the mortgage can be seen to satisfy their affordability criteria.

She might need a guarantor or another party to the mortgage if the lender won't take her on on her own, but you don't mention if that is what she wants to do at this time.

If she does nothing, the mortgage will simply continue with her paying it from whatever funds she sees fit.

Kramoose

kingstreet wrote: »

The mortgage isn't going to change because they've split up. One party will continue to live in the property. The other won't, but both are jointly and severally liable for the mortgage payments.

At some point, they may wish to transfer the property and mortgage into one name but the lender will not permit that until the person taking on the mortgage can be seen to satisfy their affordability criteria.

She might need a guarantor or another party to the mortgage if the lender won't take her on on her own, but you don't mention if that is what she wants to do at this time.

If she does nothing, the mortgage will simply continue with her paying it from whatever funds she sees fit.

Sorry, you are right, I missed out that whilst the split is relatively mutual, the best thing would be for a clean break for both which would involve her buying him out and taking on the mortgage herself. As I say, her total income incl. benefits would be enough to pay the mortgage, all bills and have a normal life but her actual income from working would only be circa 650/month.

We are just trying to understand what can and cannot be done.

kingstreet

Lender attitude is going to depend on how much equity there is in the property and how the income stacks up against how much she needs to borrow.

Lenders like Halifax and Nationwide will take things like Tax Credits into account, but it's going to depend on how risky they view the overall case.

Putting it simply, at the moment they have two people they can chase for payment. If they take off one of them, that cuts the potential payers by half.

Your friend is going to have to call or visit the lender to find out what can be done at this time.

dimbo61

My G/F now my wife did this a few years ago when she split from her EX with her dad being guarantor.
She only worked part time and stayed with her existing lender a local building society so first port of call is her lender