married couple - home and mortgage each ?

richbeth

Hi,
my wife and I currently have a joint mortgage and are thinking of moving house. We would like to avoid a chain so are considering options.

We have a fairly small mortgage on our current house so I wondered if the following would be feasible.
1) remortgage current property in my name (remove wife from deeds) to raise deposit.
2) wife uses deposit and gets a mortgage on the new place in her name
3) sell current home (and pay any early redemption penalties)

The total mortgage lending would be higher than we would be loaned if it were a single mortgage in joint names. Each individual mortgage would be within the limit that could be borrowed for a single income.

e.g. not real figures
current property worth £300k with no mortgage
I borrow £150k against this (4x income)
use £150k for deposit and wife borrows £200k (4xincome) to but home of value £350k

total borrowings £350k lets says this is 4xjoint income so wouldn't be lent us as a single mortgage but each individual mortgage is within 4x that person's income.

The mortgages would be affordable for us but obviously there are costs associated with paying interest, arrangement fees etc. however in the current market the power of being a cash buyer should offset this.

I'd be very grateful for feedback from anyone who knows about this or who may have an alternative suggestions.

Thanks in advance,
R

amnblog

Should you move - what are you going to do with the current property?

richbeth

amnblog wrote: »

Should you move - what are you going to do with the current property?

Hi,
we'll sell but we may live between them for a year or two (they would be 200 miles apart) before doing this.

cheers

alecsa

Wife has to declare what the source of the deposit is. What will she say? And can you actually afford payments on both mortgages for a while?

If I were you, I'd sell, move to a rental, then buy - might be less costly and simpler than your idea.

Wh05apk

Few lenders will accept the deposit from you, if the mortgage is just in your wife's name.

Why not get consent to let/switch to BTL then rent property out, and then you could both be named on the new mortgage?

Problem may be getting hold of the deposit, this may entail switching mortgage to a BTL to raise additional funds.

richbeth

alecsa wrote: »

Wife has to declare what the source of the deposit is. What will she say? And can you actually afford payments on both mortgages for a while?

If I were you, I'd sell, move to a rental, then buy - might be less costly and simpler than your idea.

Good point re the deposit, we actually have an offset mortgage so most of the the deposit would come from savings that happen to be in the offset. the rest could come from selling some investments if abolsutely necessary.

Paying both mortgages not an issue, we currenly spend only ca 50 % of what we earn and that's without tightening the belt.

Moving to rental not really feasible due to menagerie ! Also the whole point is to remove the dependency on having to sell one house before buying another.
R