Somebody help please.

squiffyjack

I have posted about my situation in the last week, but just don't know what the best option is!! Me and partner are separating we have
outstanding mortgage £97,350
house value £270,000
I need £150,000 for mortgage and pay him equity (i want to stay in the house)
I earn £30,414 (no debts)
I am trying to sort the money out but getting confused, do I need a new mortgage (as its just me now), a remortgage, or a loan to pay the equity? Can anybody help please. Jackie

herbiesjp

Hi Jackie

Do you have any tie-ins with Northern Rock?

What have they offered you?

You may get something agreed, on the basis that you do have a lot of equity in the property and lenders may be willing to be a bit more flexible in their approach

squiffyjack

The outstanding amount includes early redemption, without itthe outstanding mortgage is £95,000. They have offered me a secured loan (variable 6.49% with 0.85 discount) to run alongside the mortgage term which is at 19 years with a £349 set up fee, I can get the mortgage and loan fixed together at a later date, but will have to pay redemption and set up fees.

MortgageMamma

Hi Jackie

Has the court agreed you have to pay your ex partner this amount or is this the amount you have agreed between you? It seems a bit unreasonable for a court to rule you take a mortgage of almost 5 times your salary to pay off your ex. I have solicitors come to me for affordability statements for their clients all the time on divorce cases and never once would I have put into print that I think someone should borrow 5 x salary. Could your ex not settle for a smaller upfront cash amount and a second charge on the property when it is sold? Do you have dependents to support?

squiffyjack

Its what we have decided, the total equity in the house is £172,650, his half would be £86,325, by getting £150,000 this would allow me to give him £52,650, and the rest I can raise by selling my car/using my savings/lending off mam & dad. We have no dependents, and contributed equally to household. I want to try and keep the house.

MortgageMamma

Ok I understand your viewpoint. Would it be possible for you to get a second job/overtime of some sort to make the new mortgage payments a little easier to manage? How about getting a lodger in to generate some extra cash.

Whilst its good you have no debts, supporting the whole mortgage along with bills and general living costs would need some careful budgeting, unless you intend switching some of the mortgage onto interest only, or perhaps you could look at extending the term on a capital repayment mortgage?

The secured loan option with NR does not sound too bad, but, have you worked out what the early repayment charges would be on your existinfg mortgage before you decide to take that step? the reason I'm asking you to do that is because even with the loss of the early repayment charges, you COULD be better off changing to another lender, and borrowing all the money in one mortgage. Added to which, whilst NR are quite generous with their income multiples, their added fee's are quite high, so another lender could reduce costs in this sense as well.

squiffyjack

Thanks mortgagemamma, with my work i cannot have another job due to short notice shift change and callouts. Don't fancy a lodger, have looked at the figures and I can afford everything, might even save some months! and luckily can rely on mam and dad if needed (hope not to though). I have been looking at other lenders also but getting so confused. why are things so complicated!

MortgageMamma

Life is complicated! and I'm starving and need my tea, but all I can really say is (and you don't seem the sort to do this) don't jump into any mortgage contracts with your eyes shut. Speak to a broker, get them to do the sums and come up with the cheapest deal possible. At a time like this when getting a fresh start its important to get yourself in the best situation possible financially

herbiesjp

Hi Jackie

It does sound like you know exactly what you want, and have looked into all the options, so well done for that.

It look slike you will indeed go into whatever option you go form with your eyes wide open, knowing full well your affordability and have contingency plans.

Now it's just a case of finding the right solution for you.