help and advice please

leso_2

about to go through divorce,and have to pay half of house value to ex wife,expected to be about £90000. i would like to stay in house myself which means i have to find £90000. the question is after looking at various sites eg charcol and different mortgage providers to repay a capitol and interest mortgage on that amount i would find the payments rather too much.
but!! i also own another house left to me in a will, which my wife has no claim to but which my mother will live in until her death. the question is if i took an interest only mortgage is there any way this can be used as security as opposed to an isa or endowment the current value of this house would probably be around £80000. any advice on this or rcommendations would be greatly appreciated.
many thanks in anticipation.

martinhp

That should not be a problem. Most lenders are no longer fussed about having an investment tied to an interest only mortgage. They just put the onus on you. If you don't pay back the mortgage, they take the house (they are happy with that idea) So as long as you believe that that your mothers house will be more than enough to cover the mortgage and will also 'be available' by the time the mortgage term is up, it should be fine.

Mortgageman

I'm not sure your question makes sense, I may be misreading it but here are a couple of thoughts

1) You have a house, one assumes there is a mortgage on this at the moment

2) You have to give your (soon to be ex) wife half the equity in the property (not the house value, but the value minus any mortgage)

3) There should, therefore be enough equity in the property to take another mortgage

4) Your current mortgage is on capital and interest, but if you were to take this extra borrowing also on a capital and interest basis, it would be too expensive

5) You could have a split loan on the current property - part capital and interest, and part interest only.

I assume, that at some point in the future you will use the sale of the other property to repay the interest only amount.

Does this make sense?
Is there a particular reason why you had discounted this option?
Have I missed anything?

MM

leso_2

HI and thanks for replies, mortgage for present home is an interest only with endowment (underperforming) for £18000. so once this is settled up i will have to give wife half of what is left of value of house about £81000
eg half of £180000 = £90000 minus her half of £18000 outstanding debt =£9000 leaves £81000.
other house i own has no mortage on it at all, i know its confusing and this has probably made it worse but the point i am trying to find out is if i take an interest only martgage out will i have to put mothers house up as some form of security. :-/ think thats already been answered. is there any type of mortgage i would be better off going for bearing in mind i shall have money to pay debt off in years to come.
once again many thanks to all.

Mortgageman

So, tons of equity which is good

I think I get your gist now - and as MartinHP said, many lenders nowadays do not require proof of how you are going to pay the loan back (in the wya of assinging policies for example).

The security for the loan will be the current residence (you could of course take out a mortgage on your other house if you wish).

martinhp

Short answer. You apply for an interest only mortgage and one day you can sell your house (that mum is in) and pay off the mortgage. Most lenders will not have a problem with this. hope this helps

leso_2

again thanks for replies, i feel happier now. i now know what to do in what is a fairly traumatic time of my life.