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Mortgage advice for a friend
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magpie2
Posts: 3 Newbie
[EMAIL="befeline@sky.com"]Hi[/EMAIL] - first post from a long-time lurker here.
Someone I know has a problem and I'd be grateful for any thoughts.
He's getting divorced, his ex wants a chunk of the house they own together. Value (approx) £220K, outstanding mortgage £85K. She wants about £70K (ie half the equity) which seems more or less fair enough.
He doesn't really want to sell. I know some would advise selling up, and I will mention the option and the arguments for it. Though due to his circumstances I personally think this might be emotionally the worse option. He could also possibly downsize. But if he stays on, he needs to extend the mortgage to about £160K in order to take her equity out and pay her off.
Problem is his work is freelance and erratic and he is in a bit of a rough patch. So his bank aren't keen to extend the loan based on his earnings. Now if he does do this he will probably be able to cover some or all of the extra costs by taking in a lodger, and it will still leave him the option of selling up or downsizing later, so I don't think it's a bad plan for him.
Any thoughts on what the best way of remortgaging to achieve this would be? In effect the extra loan is a kind of BTL loan as he intends to cover it with rent, but will the bank recognise that? Are there mortgage providers who would be more likely to make this loan than others? etc etc.
Any thoughts welcome, as I'd like to give him some useful advice if possible.
Someone I know has a problem and I'd be grateful for any thoughts.
He's getting divorced, his ex wants a chunk of the house they own together. Value (approx) £220K, outstanding mortgage £85K. She wants about £70K (ie half the equity) which seems more or less fair enough.
He doesn't really want to sell. I know some would advise selling up, and I will mention the option and the arguments for it. Though due to his circumstances I personally think this might be emotionally the worse option. He could also possibly downsize. But if he stays on, he needs to extend the mortgage to about £160K in order to take her equity out and pay her off.
Problem is his work is freelance and erratic and he is in a bit of a rough patch. So his bank aren't keen to extend the loan based on his earnings. Now if he does do this he will probably be able to cover some or all of the extra costs by taking in a lodger, and it will still leave him the option of selling up or downsizing later, so I don't think it's a bad plan for him.
Any thoughts on what the best way of remortgaging to achieve this would be? In effect the extra loan is a kind of BTL loan as he intends to cover it with rent, but will the bank recognise that? Are there mortgage providers who would be more likely to make this loan than others? etc etc.
Any thoughts welcome, as I'd like to give him some useful advice if possible.
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