First Post - Mortgage advice/guidance needed please.

tommytroute

First of all Hello all , This is my first post on the forum, my names Tommy. I hope some of you can help me.

I have browsed sections of the forum in the past but have decided to join the forum in the hope that I can get a clearer understanding of my position and options available to me as well as some guidance and direction from those more experienced than myself with mortgages.

To cut a long story as short as possible, I took out a Joint Mortgage with BOI (Formerly Bristol & West) at the age of 24 with my fianc! at the time and my 1yr old daughter. The mortgage we went for was a 5 year fixed rate of around 5.5% , around £99k (repayments approx. £580 per month). The purchase price was £106,000

We took the joint mortgage out on the understanding/agreement that she would return to work part time at some stage in order for her to help me out financially. After a year or two things just didn’t work out for us, there were a number of contributing factors including the fact that she made no attempt to return to work or to contribute financially.

We split up and went our separate ways, However, it was agreed between us that I would keep the house and continue paying the mortgage as I had been doing anyway and we could get her name removed from the mortgage. Straightforward I thought.

However, at the time I never realised the financial implications of having her name removed from the mortgage, application for a mortgage in my name only, deeds etc. When I discovered all of this, I realised I couldn’t afford to do all of this whilst simultaneously paying the mortgage, council tax, bills, child maintenance etc . I informed my ex about the cost by text message at the time but she didn’t even acknowledge it with anything other than ‘okay’- needless to say I was never offered any money from her to resolve the matter.

For the past 4 years or so I have just continued on paying the mortgage, paying child maintenance and generally scrimping by on very little spare cash for the majority of this time(despite earning between £26-31k in this time). The Fixed rate ended about a year or so ago and I went onto an SVR which reduced my payments slightly. I think I now pay around £520 per month and my balance is somewhere around £90,000.

I’m unhappy with my situation, I no longer want to live in the property, particularly as it’s a joint mortgage I feel I’m chained to my ex and it’s been on the market now for around 2 years with no luck. I have been looking for around £98k at the beginning now dropped to o/o £92k, this was basically just enough for me to cut my losses and cover legal expenses without touching my savings. However I’m not sure this is even the best approach as I’m not sure about my ability to get another mortgage in the current climate. I now live with my new girlfriend of 2 years in the property who thankfully does contribute and she is continually urging me to do something to resolve it as she knows it makes me miserable.

I now have about £2k in savings which I would like to use as efficiently as possible.

I would like to know what the options open to me are and any advice on what I should do would be amazing? My ideal scenario would be to move into another flat, with a smaller mortgage (approx. 80k) and with no ex-gf tied to it. Would this be in any way possible to achieve given my circumstances and the current climate?

Also, if I’m forced to stay in the house I’m currently in what are my options there? Is it likely that I will need to stay on SVR or is there any way of arranging a new mortgage in my name only?

I very much look forward to any advice anyone has to offer.

Thanks

Tommy

kingstreet

You would need to sell the property and repay the mortgage, or carry out a transfer of equity to remove your former partner from the mortgage and deeds. If you cannot take on the mortgage/property alone would your new partner wish to join you?

Either way, you need the agreement and permission of the lender and your ex-partner to any of the options.

A new mortgage will be based on current criteria, loan to value and status requirements.

tommytroute

kingstreet wrote: »

You would need to sell the property and repay the mortgage, or carry out a transfer of equity to remove your former partner from the mortgage and deeds. If you cannot take on the mortgage/property alone would your new partner wish to join you?

Either way, you need the agreement and permission of the lender and your ex-partner to any of the options.

A new mortgage will be based on current criteria, loan to value and status requirements.

Thank you for that very quick response J

So there is no way of staying on with this lender and having my ex removed without filing a new application and setting up a new mortgage agreement?

In terms of repaying the mortgage and buying elsewhere I would have a bit of a problem with LTV on anywhere else with my small savings.

Would the transfer of equity keep me on the current mortgage terms or would this involve a new application? And would they need to look at things such as LTV etc again despite the fact I’ve been living in it for 6 years? Is this basically my only way of retaining a mortgage anywhere but without her name attached?

Unfortunately my partner would be unable to join me on a mortgage. She has a very poor credit history.

Thank you again for your help.

kingstreet

You may not have to complete a new mortgage, but the TofE requires income and affordability assessments similar to those at the outset of any new mortgage.

You really need to ask your lender what it does/needs as we can only generalise on here.

A TofE doesn't normally involve new credit checks on you or scrutiny of loan to value, but will look at your income.

The mortgage rate is normally unchanged.

tommytroute

kingstreet wrote: »

You may not have to complete a new mortgage, but the TofE requires income and affordability assessments similar to those at the outset of any new mortgage.

You really need to ask your lender what it does/needs as we can only generalise on here.

A TofE doesn't normally involve new credit checks on you or scrutiny of loan to value, but will look at your income.

The mortgage rate is normally unchanged.

Thanks Again KingStreet,

I will speak to my lender about this. I prefer to get some help on here first because lenders typically confuse me with their lingo and I come away feeling like I don’t really understand.

So what you are saying is typically in a ToE they don’t reconsider LTV they only really assess me financially. And typically I would stay on the svr?

Looks like I have some real thinking to do because I really want out of this property and into a new one but it seems the only possible way for me to achieve this is to sell my property whilst making enough of a profit for a deposit on a new property, which quite frankly just isn’t going to happen.

One other thing is that when I took my mortgage, they told me I could port it. Is it possible that I would I be able to do this under current conditions?

kingstreet

The loan to value and rate issues on a TofE are as you understand them, yes.

Portability is the right to transfer the old rate to a new mortgage. You have to qualify for that mortgage as you do with any other lender. There is no way to transfer a mortgage from one property to another, so you're barking up the wrong tree thinking you can get a mortgage with no deposit, status enquiries or evidence of income that way.

tommytroute

kingstreet wrote: »

The loan to value and rate issues on a TofE are as you understand them, yes.

Portability is the right to transfer the old rate to a new mortgage. You have to qualify for that mortgage as you do with any other lender. There is no way to transfer a mortgage from one property to another, so you're barking up the wrong tree thinking you can get a mortgage with no deposit, status enquiries or evidence of income that way.

Okay, thank you for clearing all of that up for me.

Well it looks like I’m left with no option really other than to sell the property at a loss now and start over with saving. I suppose the one saving grace is that at least this way the ex will have to take a hit also