Buying half my new(ish) wifes house

dominicallkins

Hi all

Hope you can help.

My new(ish) wife and I got married (2nd time around for both of us) nearly two years ago and are only just getting around to sorting out the house.

The basics are (rounded numbers for ease):

House value - £240K
Outstanding mortgage - £120K (at a very good rate)
Equity loan - £30K (key worker loan - wife's ex)

Me: good salary
Wife: part time at school as TA

We'd like to release some equity in the house to get some nice home improvements done.

We've spoken with the bank and it's not as simple as adding me to the existing mortgage. Apparently we'll need to re-mortgage and will lose the great rate we have on the existing mortgage.

The house has depreciated in value over the last couple of years (but still above new purchase price 10 years ago) so now would be a good time to clear the equity loan but I don't have the odd £30K sitting around unfortunately

My thinking is this - but I'm not are if it's possible:

1. I take out a mortgage independently in my name to buy half the house from my wife at market value of £120K. The mortgage will need to be at current market rate unfortunately.
2. Wife clears equity loan of £30K leaving £90K balance
3. I assume that I'll need to take a short term bridging loan of £30K for deposit on my mortgage so that also get's repaid
4. Balance of £60K then gets used to make home improvements and pay back some of my higher-rate mortgage

To me it works. I have the funds (easily) to pay for the extra lending, we clear the equity loan and we have the money to do the home improvements.

But then the simple things in theory often seem to be the most complicated or impossible in practice.

Anyone know if the above is possible?

Thanks for your help

Dominic

OddballJamie

So you want two separate mortgages on one house?

Annisele

dominicallkins wrote: »

1. I take out a mortgage independently in my name to buy half the house from my wife at market value of £120K. The mortgage will need to be at current market rate unfortunately.

Sorry - that's not possible.

Your wife can't sell her house (or any part of it) without her mortgage lender's permission. The lender won't give permission unless the whole of her existing mortgage loan is repaid - which leaves you losing the rate you've got.

Separately, you won't get a mortgage in just your name if the house is going to be owned jointly. Your lender would want to make sure it could repossess the house if you didn't pay - and it wouldn't be able to do that if your wife's claim on the house came before its own claim.

Is your wife's ex still named on the mortgage? And if so, is she/you going to have to pay any of the equity to him?

kingstreet

You need the permission of the second charge holder before you can start a transfer of equity to remove the previous owner and have you added.

To be able to remortgage, you'll also need a deed of postponement from the second charge holder. Otherwise, the second charge is promoted when the mortgage is repaid and that won't be acceptable to the new lender.

You are unlikely to be permitted to increase your mortgage for any purpose other than reducing the second charge loan.

You'll therefore need to put repayment of the second charge at the top of the drawing board.

You need to contact HOP - Housing Options Plus, the division of Metropolitan Homes which administers shared equity post-sales issues for FirstBuy, Homebuy Direct, London Wide Initiative and First Time Buyers Initiative. Their email address is hop.team@metropolitan.org.uk. Phone 08454 700121.