Mortgage options if I give up work?

taylor86 · 8 August 2014 at 12:37PM

Currently we are trying to sell our house as we have 2 young children and need more space. The mortgage we are looking to get would be for a similar amount or possibly less than our current amount.

Due to circumstances beyond our control i may be temporarily forced to leave my job in sept/oct.

If our house sold and I was not working what would happen with a new mortgage application? Would my husband apply as a single applicant or would we both apply but without me giving income figs? Would I class as a dependent and drastically reduce his lending amount?

The house and mortgage are currently in joint names.

Mortgage_Mark_2 · 8 August 2014 at 12:46PM

You can be on a mortgage without earning an income, however as you say you would then be classed as a dependant and it could effect affordability.

One thing to bear in mind though is that if it's currently in joint names, taking out a new mortgage just in your husbands name would be a transfer of equity, meaning additional legal costs and potential stamp duty liability. If you then wanted to go back to a joint mortgage in the future, you'd have that all over again.

taylor86 · 8 August 2014 at 1:09PM

Thanks for that, I didn't realise that would happen with transfer of equity. It's all so complicated!

taylor86 · 8 August 2014 at 1:11PM

What would happen with transfer of equity if we sold up and rented then a few months down the line bought again in one name? Would it be the same situation?

Mortgage_Mark_2 · 8 August 2014 at 2:04PM

If you sell up, there's no equity to transfer, you've sold it. You then simply buy the new property in whichever combination of names you want.

taylor86 · 8 August 2014 at 3:42PM

Ok, so does equity transfer only apply on a new mortgage on the same property? If it was a new property could he just buy in his name using the equity from our current home as long as the affordability stacks up?

Mortgage_Mark_2 · 8 August 2014 at 4:55PM

taylor86 wrote: »

Ok, so does equity transfer only apply on a new mortgage on the same property? If it was a new property could he just buy in his name using the equity from our current home as long as the affordability stacks up?

It's a given that when you buy property there is a transfer of equity, that's why solicitors bills are so expensive when doing so. A straight forward remortgage doesn't usually involve a TofE unless you're doing a change on the ownership of the property, as mentioned above.