Seperating, how can I afford mtg?

mkbswimstar

I wonder if anyone can help please.
I am leaving my partner for numerous reasons and we have a joint mtg. I want to keep house for myself and kids and am prepared to give him money to leave.
The problems are;
Mtg - £156k
House value £265k
Lender - Nationwide 5yr fxd 3.79%
Repayment £917
Int only £450

My income: £800 net a month.
His income £2000 net a month.
Council tax at mo £180 a month.

I predict he will need to pay maintenance of £80 a week, based on gov website.
We have 2 children under 9.

How can i stay in this house.?If we sell and split equity I would end up with about 80k. Houses here for a 2 bed are £150k minimum. I cannot see anyone lending me mortgage for a new house.
If I take the 80k another option is to rent but I won't qualify for any help and the 80k would be gone very quickly as I would need to live off it too.
Is there anyway I can keep the house, and swap the mtg to interest only, and claim the benefits I would need?
The alternative is to rent and use up to 80k and then be eligible for even more benefits. I really don't want to be on benefits, but I do need to keep a roof over my familys head.

My parents are elderly and don't work but could they somehow be guarantors on a mtg?

Has anyone got any advice at all please?

Thanks in advance.

epz_2

I am not sure i understand your maths.

£265k - £156k = £109k

that means if you halfed the equity to £54.5k you end up with an outstanding mortgage of £210.5k and a ltv of just under 80%. At 5% your interest only payments would be £877.

Even if you husband walks away from the equity and leave the amount outstanding as £156k at 5% would be £650 a month interest and 5% is a very low mortgage rate historically.

Also consider if selling the 250k stamp duty threshold may well force the sales price down to that level and there will likely be legal fees to consider.


Anyway I would be surprised if you could afford to run a house with two kids and the usual household expenses on just your salary let alone find a lender that would agree.

There may be a way to structure your separation in such a way that doesn't effect your benefits, could for example your husband take over the mortgage and rent it back to you as a BTL etc.

samroo

Are you absolutely sure about coming out with £80k. By my calculations you would only get a max £54.5k (265-156/2).

Also with your current salary of c. £12k a year, there is no way you can service a mortgage to the value of £156k so the mortgage company wouldn't agree to your husband coming off and a new mortgage just in your name.

I think you need some proper legal advice about what the next steps for you will be, but from what I can see it looks like you will need to sell up and rent - unless of course you husband is willing to keep paying the mortgage.

mkbswimstar

Hello, thank you for your reply.
On buying the house I put all the equity in, so have planned to give him 20k if I sell. So that takes me down to 80kish after fees and as you say a lower selling price.
or:

Our mortgage at the mo would be £450 on interest only if it is kept the same, just taking his name off. I can possibly get £20k from a relative to pay him to leave without repayment. They hate what he has done to us.

BitterAndTwisted

If you don't have the income necessary to service the mortgage you won't be able to buy him out. That's assuming he's happy to leave the property and his children and then sell you his share to start with.

In some separation agreements it is possible to remain in the property, share the mortgage-payments and agree to sell it/split equity once the remaining partner is able to earn enough to buy the other partner out/when the children cease to be dependents. Don't forget that in the meantime the departing partner will need to have enough income to finance their own housing on top of the share of mortgage/child maintenance.

You need some proper legal advice and until you do, do not come to any informal agreement/arrangements.

BitterAndTwisted

mkbswimstar wrote: »

On buying the house I put all the equity in, so have planned to give him 20k if I sell. So that takes me down to 80kish after fees and as you say a lower selling price.

Are you married? If not, did you have a Deed of Trust drawn up to protect your equity when you bought this property together?

What makes you think that he would be happy waking way with £20k instead of half of the equity plus paying you child-support and you keep all of the remaining equity?

mkbswimstar

not married. No we didn't get deed of trust done! I know all was good back then. He has in arguements agreed that I own most of it and he would let me keep most as i would have the kids.
So he may agree to sign one on seperation. (I pray).

dimbo61

Please do not borrow £20.000 from family or friends and try to pay him off.
You will not get a mortgage on your own so either he stays on the mortgage or you sell up and buy a cheaper house with your share of the equity and mortgage ( 3/4 times income )

mkbswimstar

Unfortunately on my income I won't be able to get a mortgage big enough to buy in this area. So it looks like i'm gonna have to waste the equity on renting.

mkbswimstar

Is there anyway I can keep the house, can my parents be guarantors, even though they are retired. Have their own decent property mtg free.

pinkshoes

If your net salary is only £800 a month, then this means you earn less than £12k a year.

You would be able to borrow a MAXIMUM of 4x your salary, so £48k. If you have £80k equity, then your budget for a house is £120k!

There is absolutely NO WAY you can afford to buy your ex out.

Guarantors are usually for people with bad credit ratings, NOT low earners I'm afraid.

The only solution would be a £100,000 GIFT from your parents!