Mortgage lending for lone parents

Ann5028

I am a lone parent and took out a mortgage six months after separation. The financial adviser and the mortgage company used the maintenance payment as part of my admissable income. I have what I regard for a single person on average earnings, outside of London a fairly large mortgage of £140,000.

I have asked my FA and also gone direct to payment protection providers about protecting either the maintenance payment, or my ex-husband's salary. Apparently no such product exists. The best solution is for him to take out income protection and then draw up some kind of legal memorandum so that he undertakes to pass the money paid out to me. Clearly this is very unsatisfactory as it depends on him being cooperative.

Now that it is very possible that redundancy is looming for my ex husband in practical terms this has become theoretical as it is too late for him to take out income protection (assuming redundancy follows in the next few months). I AM REALLY ANGRY THAT I WAS ALLOWED TO TAKE OUT SUCH A LARGE MORTGAGE THAT IS DEPENDENT ON A FACTOR WHICH IS OUT OF MY CONTROL. I take responsibility for it but at the time when I was vulnerable and only interested in providing a home for my children, and frankly would have accepted any offer if it meant I could achieve this.

I am interested to know if anyone else has the same experience - surely they must do so why isn't there a product to cover us? - and also who I should complain to. It is not even really a complaint as it seems it is just the way it is in the insurance industry not to provide a product to cover this eventuality.

Lotus-eater

Ann5028 wrote: »

I AM REALLY ANGRY THAT I WAS ALLOWED TO TAKE OUT SUCH A LARGE MORTGAGE THAT IS DEPENDENT ON A FACTOR WHICH IS OUT OF MY CONTROL. I take responsibility for it

You obviously don't take responsibility for it. Or you wouldn't be angry that you were "allowed" to take it out.

I'm "allowed" to borrow £25k tomorrow if I want it, doesn't mean I'm going to.

balletshoes

Lotus-eater wrote: »

You obviously don't take responsibility for it. Or you wouldn't be angry that you were "allowed" to take it out.

I'm "allowed" to borrow £25k tomorrow if I want it, doesn't mean I'm going to.

OP I don't know about any product such as you're looking for, but I do have to agree with LotusEater, its completely your responsibility to ensure that any loan you take out (and a mortgage is basically a ginormous loan) is manageable for you regardless of what financial circumstances you find yourself in.

When we were mortgage-hunting, I could have easily had a mortgage for around double what we wanted - but I knew I would be very uncomfortable paying the monthly interest/capital on that high-end figure, so we just didn't take that much of a mortgage. We took what we could afford to repay, on one income.

Memory_Girl

Might I make a suggestion - that you pop on over to the people at the DFW thread and work towards completing a SOA - looking at how you can organise your finances to ensure you can continue to pay your mortgage should your maintenance payments cease.

Being in control will help you sleep better than worrying about the "what-ifs"

I'm a single Mum of two - and I have a mortgage of £126K (although in Scotland not London) - my income is limited because the little one isn't at school - but with £800 odds coming in I am still paying my Interest only mortgage and paying the capital down by a couple of hundred every month. It can be done.

Good luck

MG

fannyanna

You can only protect YOUR income and not someone elses just because you're reliant on it. To be honest I think you've made a foolish decision - you've put yourself at the mercy of your ex. Basically if he loses his job (or decides to be awkward and not pay maintenance) you lose your home.

I really do wish I could offer you some constructive advice but I genuinely can't think of anything and I'm not sure if anyone else will be able to come up with a solution.

monicaj

When I took out a mortgage as a lone parent albeit 12 years ago, I never even contemplated using maintenance payments as admissable income. Not sure it would even have been allowed.

Even so, you did, therefore surely some form of Insurance is something you should have considered BEFORE taking out such a huge loan, rather than blame everyone else now that income is under real threat. It's much like saying I don't need sickness cover, I'll never be ill, then getting diagnosed with a life threatening illness and being angry with everyone for not being able to take out a policy to cover that. Illness is also something mostly out of our control.

I'm sorry you find yourself in this position, it must be a huge worry, but as another poster has advised I think your best bet is to look at your SOA and go from there.

Good Luck

flutterby_lil

I think you only have yourself to blame - he (your ex) could at anytime leave his job and go on the dole, where would that leave you?

No other advice to give sorry.

FBaby

When I became a mum and re-mortgage the house so it would be under my name only, I had the exact opposite experience. Not only was maintenance not allowable as regular income, but neither was tax credits!! The first one didn't surprise me at all and I wouldn't have wanted this into account (rightly so as he was made redundant three months later and didn't get a penny out of him for years and even now i have to beg every months for it), but was quite surprise about tax credits.

You have to see it on both sides. The alternative might have been that you wouldn't have been a home owner and maybe now you would be angry that you have to pay high rental prices, or that you're being made homeless and that it is a disgrace the bank didn't take maintenance into consideration.

I don't really think you can complain about it. It was your responsibility to insure that you could afford the repayments no matter what. Everyone is desperate to hear that they've been approved for their dream house, desperation is not a factor that justify manipulation on their part.

daska

When DS1's dad left (15 years ago) a financial adviser actually suggested that I get insurance to cover maintenance payments. When I looked into the possibility I found it wasn't an option and concluded that it was a sales tactic. More worryingly, yes, the mortgage company included maintenance payments as income and told me I could easily afford 'x'. To which I pointed out that I couldn't because my childcare costs were pretty much equal to the amount of money left after making the mortgage payment and covering utility bills (i.e. nothing for food, clothes, car that I needed for work). They poo-poohed that refusal, insisting that my mum could look after DS1, didn't seem to matter to them that mum lived 50 miles away and worked full time... Just because the offer is there, doesn't mean you should take it.

Use the energy that is currently being wasted on the anger to do something constructive about shoring up your financial position.

the_cat

Financial advisors exist to make profit for themselves
Banks/mortgage providers exist to make profit for shareholders
Insurance companies exist to make profit too. If they don't offer a product, it is because there is no money in it for them. They are not obligated to provide you a safety net

YOU exist to ensure that you borrow only the money that you can afford. Any number of factors could have affected your maintainance at any time. If after all that has gone on over the last few years in the economy, you still decide to go ahead and bank on money from your ex that cannot be guaranteed, you have only yourself to blame

BTW you didn't have to buy a house out of your price range to provide a home for your kids! Either buy cheaper or rent. Hundreds of families do, so to claim you were desperate and vulnerable and therefore at their mercy is pushing it a bit tbh!

pinkshoes

I'm afraid it was YOUR decision to rely on the maintenance payment to pay the mortgage, so you now need to come up with a new plan to find that money some other way.

Could your ex look after the kids one or two evenings a week whilst you get another job?

Do you have a spare room you could let out to a lodger?

Could you sell up and buy something cheaper?

A colleague of mine is just about to go self employed, so the £300 he currently gives his ex every month is about to be reduced to £95! At least your ex has given you advanced warning that he might be made redundant!!