Is it possible 2 have 2 residential mortgages

ran123ran_2

My daughter and her husband have started divorce proceedings.
They both jointly own the house they live in at the moment & have a £155k mortgage on it (house value - £300k). They bought it for £360k pre credit crunch. They are not going to sell until the price recovers.

My daughter is looking to rent a small place for herself but finds that she will be better of buying instead as the rent payment is almost the same as a mortgage payment.

Is it possible for her to get another mortgage whilst still having a joint mortgage with her "husband"?

In terms of affordability - she needs a £60k mortgage on a flat costing £100k. Her salary is £45k. No kids.

Advise appreciated. Thanks.

Thrugelmir

ran123ran wrote: »

They are not going to sell until the price recovers.

And if the price recovers but the ex doesn't want to sell the property? Clean breaks financially are advisable.

You daughter is also liable for the existing mortgage in terms of affordability. Run the full financial position past a broker.

Annisele

In theory, yes - you can have two residential mortgages, so long as you can show you can afford both of them.

In practice, if a clean break is possible it's usually the much better plan. Can either your daughter or her ex afford to buy the other out? If one of them can remortgage into their sole name and pay the other off, than would probably make life easier for both of them.

Mrs_Soup

If she sold the old house she could practically pay for the new 100K one outright. Or at least with only a tiny mortgage payable in a couple of years.

dimbo61

It is not a good idea for your daughter to move out!
What happens if EX finds new partner with 4/5 kids and they move in!
One hell of a job to then get EX to sell and give 50% equity.
Know Idea of who paid what at the start DEPOSIT% and Mortgage share !
Time to cut losses and sell up

ran123ran_2

I have discussed the possibility of him changing his mind re selling in the future endlessly - she said he is willing to sign a legal declaration to say the house will be sold in XX years.

They both put in equal deposits when buying the house and every month would pay equally into a joint current account to cover the mortgage and household bills ,etc. She said she will continue to pay enough to cover the mortgage & insurance - its currently c£900 per month so she would still pay 50% of that. She won't be paying any other household bills for that house & her "husband" is in agreement with that.

My daughter won't buy him out as his friends and family stay in the same development and she doesn't want to keep bumping into them. He can't buy her out as he won't get a mortgage in todays world. His income is a lot lower than hers.

PBA

The new lender would have to assume that your daughter is paying the full mortgage on the current place as well as on the new one. This would be total borrowing of £215 on a salary of £45, which might be possible.

I agree with others though, hanging onto a property you don't want to own just because you're losing money on it at the moment is foolish. Yes on paper your daughter lost money if she sells the current property now, but also the new place she buys will cost less than if she waits a couple years while prices increase.

If she really doesn't want to sell she could always buy "husband" out on a buy to let basis, then rent the property to him. She could probably raise enough equity with the buy to let mortgage to buy him out as well as buying a new place to live in.

mrginge

Not selling it until the price has recovered is pointless.

The problem you have is you are locking your equity in for an unknown period, chasing a market rise that you think will reverse a loss and ignoring the fact that you can liquidate now and reinvest in an alternative asset class that may give you a much better return without the baggage of an ex potentially causing you untold problems at the point in the future when you need to liquidate.

Read the number of threads on this board from separated people who are still joined on a mortgage. It's really not a sensible move imo.

hcb42

sell now and escape

THis £60K they are chasing is gone, it might not come back for years

enthusiasticsaver

Waiting for a house to recover a pre credit crunch price is not sensible. Your daughter and soon to be ex are not in negative equity so there is no reason to delay selling and I would advise a clean break financial settlement - sell property and 50% equity to husband and your daughter which would leave her with a good deposit to put on a new property in just her name. It sounds like he has realised he is on to a good thing - he stays in the property and she still coughs up half the mortgage plus has to cover the cost of renting or buying a new property. Really bad idea especially if her husband moves someone else in.

ran123ran_2

Agree clean break is the way to go forward.
Can her "husband" be forced to sell?
I can see him not co-operating to sell now

.