Relationship break up, changing mortgage

larkim

Hi

A friend of mine is in the process of breaking up with his girlfriend (relatively amicably!). They live together and are joint names on the mortgage for the house they own (can't remember whether they are tenants in common or joint tenants).

Anyway, the long and the short of it is that they need some financial headroom for perhaps the next 2 years whilst they sort things out - one will move out into rented, and the other will stay in the property.

They are considering asking the bank for an interest only mortgage, with the prospect of returning to a repayment in 2 years time.

What is the bank's likely attitude to this, and what alternatives could they consider? I've suggested asking for a straightforward mortgage holiday. I presume when 1 in 3 marriages ends in divorce, this isn't a particularly uncommon situation?

Thanks!

Matt

The_J

Won't allow a switch to interest only without a suitable repayment vehicle.

What qualifies as a suitable repayment vehicle is often ridiculously stupid (i.e. assuming 20% cut in the amount you currently have in ISAs) and for sale of property you need 50% equity.

They need to live as lodgers, I take it there are two bedrooms, and get on with it until one can take over the whole mortgage or the property is sold.

All going to end in tears when Cheeky Matt starts putting away his best mates ex-missus though. No-one likes hearing that through a thin wall. Good on you son.

larkim

Heaven forbid!!

That was my natural inclination (i.e. that they'd be told to get stuffed when they asked for an interest only deal with no repayment vehicle), but apparently they'd been told that it might be feasible if they have "a good enough reason".

I would have thought that a pseudo-business plan covering the short term renting / getting out of sticky situation might convince their lenders to either go interest only (temporarily) or allow for some sort of payment holiday might be a "good enough reason", but they seem to think that making up something about "we need to save the money for a close family member's wedding in Australia" would cut it.

They've got to the stage now where the amicable breakdown might stop being so amicable, having "lodged" with each other for quite a few months already.

Matt

Dave_Ham

All going to end in tears when Cheeky Matt starts putting away his best mates ex-missus though. No-one likes hearing that through a thin wall. Good on you son.[/QUOTE]

That was my natural inclination

Any how, they could depending upon age ask the lender to increase their term. This may not save them a fortune but would presume it all helps.

I am assuming there is a sensible reason why they are not just selling up and starting again?

I cannot think of anything worse than their current situation

larkim

Why not just sell up? Jobs / timescale / liking the property / prospect of increased earning power over the next two years to take on property alone.

Also, throwing away the investment made in fees / stamp duty etc when the property was bought only a couple of years ago.

Mainly the timescale thing though.

Glad the outlook is so positive :rotfl::rotfl:

Matt

The_J

I've got a friend called Flash Jon who's looking for a property, I think he's single so if we can get him and this girl together...he can buy out your mate and they can keep the property.

What's this girl like? I think Flash Jon is only likely to go for it if she's hot.