which type of loan?

sidas

hello,
I hope this is the right place to post (apologies if not).

I'm recently divorced and my ex and I agreed on him keeping the house that is now mortgage free. He paid me a sum of money upfront and we agreed that he would pay me a further £30,000 when he retired in 3 yrs time. Unfortunately the judge refused to sign the financial order so he is having to pay me within 3 months.

Would it be better for him to get a loan or to remortage the property? He is due to be retiring in 3 years although there is a chance he will be able to go in 12 months time so he would want to be able to pay it off early.

He would want something that has a monthly repayment of £500 or less but that will allow him to pay off early.

I really hope someone can help.

Phill_Anderson

Hi, I will advise you to go for loans rather than to remortgage the property. I believe he will going to get loans easily and that he can pay off in easy EMI.

chanz4

That type of money wont be easy to come by, as they will see him as retiring soon

Emmzi

when the mortgage was paid ff, did the bank relinquish the security? If not the mortgage option is probably cheapest and no so difficult to arrange.

CLAPTON

just must ask the obvious questions first

how old is he
what is his salary
what do his credit record says

zxspeccy

The mortgage route would probably be the cheapest way, however more info is needed. It is unlikely that any lender will agree a £30,000 unsecured loan especially if he is near retirement age, so the loan will need to be secured anyway. As a previous poster has said providing the mortgage company still hold the property as security, then it should be fairly quick and easy to get the funds agreed. The “Loan to Value” will also be very low which should get him a good interest rate, and should mean that the mortgage company would waive any need for a valuation (saving some fees). He will need to be careful about what deal he accepts as a 5 year fixed means he will be looking at a penalty should he wants to pay the mortgage off early. Either stay of the Standard Variable Rate (as Base Rates are still at their record low at the moment) or perhaps take a 1 or 2 year fixed deal.

sidas

thanks for the responses.

He is 57 and due to retire at 60 where his lump sum part of his pension will be £20,000 and an endowment will mature at min payout of £15,000.

His current salary is in the region of £30,000.

The mortage was paid off approx 10 yrs ago and he has a current car loan with about £5,000 remaining due to end in 18months.

He has a credit card but pays it off every month and has never missed a payment or been late paying anything.

His credit score should be very good.

sidas

when the mortgage was paid ff, did the bank relinquish the security?

sorry i'm not sure what this means?

He had the deeds back from the mortgage company when mortgage was paid off so the bank no longer have any interest in the property.

CLAPTON

retirement is a relative concept
at 57 he can reasonable get a loan/mortgage that ends when he is 65;
however it's very unlikely that anyone will be give an unsecured loan of more than 25k so that only leaves a mortgage

suggest he speaks to a mortgage broker

however, I don't quite understand the legal side of this; whatever the judge decides surely you can agree a longer period of payment if you wish?

sidas

thank you.

Without a financial order he could decide at a later date to not pay me, or I could decide that I want more from him. Also if either of our mothers die we could claim on each others inheritance. With the financial order we both agree to not claim any more at a later date.

I have agreed against my solicitors advice to just wait without the order but he would like it sorted out now as the judge has recommended.

bigadaj

Would it be possible to repay the mortgage from a lump sum element of his pension, obviously supposing that the balance is sufficient for his needs. A mortgage could then be interest only, which would reduce cost.