Mortgages after Divorce

Edw65

Can someone offer any advice on the likelihood of my (to be) ex wife getting a mortgage if she has a £100k deposit against a house valued at say £160k, with an annual income of approximately £10k?

Are there any lenders in particular that are sympathetic to divorcing couples etc..The existing family home which will be sold as part of the divorce is on a very good 1.25% above BR and am wondering whether she may be able to port this product even if the overall amount borrowed is reduced: Currently the family home has about £115k mortgage and is worth about £250k max.

Thanks in advance for any thoughts...
E

kingstreet

Annual income of £10k would suggest a maximum mortgage of about £30k, assuming a decent term.

As a far higher proportion of a lower income is used up on subsistence expenses, a lender will be very cautious with the amount it's prepared to lend.

Some lenders will take tax credits and other income, such as maintenance into account. This may increase the amount possible.

tBagpuss_2

I agree with Kingstreet.

My experience is that your existing lender **may** be slightly more flexible than a new lender - however, as the deal you are on is very good, and and porting would presumably also involve removing your name so would be technically a new application, I suspect that the lender is likely to refuse. if the product is portable you might be able to port to a new house in joint names, with provision in the order to hold the new properties as tenants in common with her having 100% beneficial interest, and to require her to get you off the mortgage within a specified time scale (possibly tied to the children leaving school, if you have children).

It doesn't get you off the mortgage but it does allow for a more affordable mortgage.

Another option might be for her to have all the equity now, which might close the gap so she could get a mortgage in her own right, then have a charge back entitling you to a lump sum further down the line. Again, not ideal as you don;t get a lump sum now for a deposit, but if she were looking to buy at £160K with a deposit of £125K it starts to look more manahgabel, and would mean you were off the mortgage.

Edw65

Thanks for the advice...going to mediation to discuss financial options...
Hadn't thought of the idea of giving up the equity in return for a future charge to give a lump sum later..We do have kids-about to go to Uni!!

Edw65

Thanks...Understand that lenders are twitchy lending to low income borrower, but had been hoping that the big deposit would sway it...Is there the equivilant of self cert mortgages anymore? And if so are the rates pretty high to price the "risk"?

GMS

No self cert mortgages.

Lenders being 'sympathetic' to divorcing couples isn't going to happen. If they were to 'sympathise' with your ex and loan her 6 x income only to find she couldn't meet the payments and have to repossess 12 months later what would be the point? It would be irresponsible lending.

Equally if she was able to self cert her income she would still not be able to make the payments and be in the same situation.

As has been said see if there is any additional income.

SallyG

http://www.savvywoman.co.uk/c8-pages/c8s2.php?art_id=1075
about child support payments - taken into account or not.

sleepygirl126

I went to GE Capital and they gave me a mortgage taking child tax etc into account

SallyG

In my run up to divorce hearings in 2006 only one mortgage provider Yorkshire BS took spouse maintenance by court order into account in only one mortgage deal and the interest rate was much higher than normal.

dimbo61

Yes YBS worth a phone call as they may take into account working tax credit and child tax credit