Divorce and mortgages

Puddle_Muddler

Hi,

So my wife and I are getting divorced. I am staying in our house, and as the value of the house has not changed since we moved in, my wife (ex-wife) has agreed that I can take on the house/mortgage/deeds and remove her.

I have in practice being paying the mortgage on my own for the past twelve months, so meeting the cost is not a problem.

I spoke to my mortgage lender today, who tell me that they cannot merely remove my wife and re-issue the existing mortgage - they need to cancel our current mortgage, and then I have to re-apply as an individual.

Trouble is, our mortgage is 100% interest only, so I am not likely to get a new deal, and if I do, it's likely to be ultra-expensive.

My question is: is my mortgage lender correct? Have I no rights in terms of continuing my existing mortgage whilst removing my wife? Are they under any obligation to transfer what I am on at the moment (which is not exactly a good % rate)?

The alternative is that they potentially force me to sell and move. At a time when the government is trying to encourage companies to lend to buyers - surely that can't be right?

Any help/advice/thoughts/suggestions welcome.

Thanks

PM

Caz3121

At the moment the mortgage company has 2 people they can chase for payment. As you want to reduce it to you alone, you will need to play by their rules, which may mean reducing the LTV to one that they currently offer a product for (or shop around and take a mortgage elsewhere)

Depending how long since you bought the house, and as it is IO, it may be worth less than you paid. Are you prepared to take on all the deficit or will your ex pay half to get their name removed?

Tracewhy

I don't know the legalities, but certainly when I divorced my ex husband took on the mortgage and he had to re-apply for another mortgage as a single person. You also have to remember to do the deeds.

Simon_gloster

It depends on the lender, but the majority will still do an affordability and credit check which usually means a new application.

You will need a solicitor £550 ish and also reduce the debt by 10%. As its interest only, ita also now likely you'll have ro prove how you'll pay the debt back.

They are right and unfortunately you have too many big hoops to jump through. The lender is doing nothing wrong.

Thrugelmir

Puddle_Muddler wrote: »

The alternative is that they potentially force me to sell and move. At a time when the government is trying to encourage companies to lend to buyers - surely that can't be right?

On the face of it you are financially stretched. An interest only mortgage amounts to renting the property. So at risk as a borrower.

Best to detach sentiment from reality. You are facing an issue people have always done. Splitting up is difficult. There's no easy answers.