Separation / mortgage Application advice

Devons_best

Hello!!

I wonder if someone show has been in a similar situation or someone who may have some knowledge can please help!?

My husband and I had been together for approx 15 years and are now separated. I am going to take on the mortgage and keep the house. However I'm worried about my application being accepted!

I am in a job and could probably earn enough for my current mortgage company to accept me as a single applicant but there are lots of issues and I don't know how to go about applying and making myself a better applicant. (I am tied in with them til April so after this date I can search around for other mortgage providers who going from on-line calculators may be more likely to offer me a mortgage)

For example I think we will draw up a financial agreement stating my husband has no claim on the house but will the mortgage company want this done before they agree to my application?

Secondly I am on a 1 year contract with my job - I have no doubt I will continue to earn enough money whatever I do (whether I stay or get a different job - I also ran a successful business which is much in demand that I could go back to if needed) but will the mortgage company see it like this?

Also we have joint debts - I am in a position where I can pay some of these off which will obviously help with the mortgage application but should I do this bearing in mind me taking on the debts will be part of the separation agreement? I want to hold off doing this but know as far as mortgage applications go it doesn't make sense to.


My bank statements show me in a really good financial position at the moment because my husband has been paying the childcare and a lump sum into the joint account but the monthly payment will soon reduce in line with the maintenance payments and my child tax credits will also reduce after April. (I was a student last year so had no income until September when I started my new job as a teacher) also from next month my wages will show the deduction in childcare costs from my payslip so will be on £200 a month less.

I'm thinking of going and having a chat in my local branch for advice and to see if they can give me an 'agreement in principle' I also need to ask them about closing the joint account.

Any advice is most welcome, TIA

ACG

I would probably speak to a broker.
The main reason being is that a lot of our job is hand holding, it just means you can explain all of your fears and concerns and then they can help to take the stress away and go through everything in detail.

The other reason is that you are on a contract and that is not easy to overcome at the best of times.

I was actually reading something the other day about a Mortgage for people getting divorced, it takes in to account child tax credits and maintenance that may not be being paid yet if you still live together. Most lenders would want to see it being paid which puts the person in a catch 22. I dont think you necessarily need to be getting divorced and spliting up may be enough. The point was that there are products out there, they may not be high street products but im sure there will be a way assuming income is there or there abouts and there is sufficient equity.

Devons_best

Thank you so much!! I really appreciate that. I pay about £500 a month for my mortgage so I really don't want to move into rented which would cost much more in the area I live in.
I'm hoping the LTV rate of being approx 65% would help too - a security for the mortgage firm iyswim.

We don't seem to have any mortgage brokers locally any more so I will have to have a look. I like that about the hand holding and taking the stress away! I feel like I'd have to have my game face on with the mortgage company themselves.

Would the fact that I have my mortgage with them already count in favour for me - in that I already have their money so it needs to be paid by someone?

ACG

It would be treated like a new application I think (although check with the lender), so you would need to meet their criteria as it stands. I cant say for sure one way or the other but lenders in the main can be fussy with contracts so it would be worth checking that also.

A lot of brokers work remotely so dont worry about them being local...although if there are NONE locally, I might open up there - no competition! :P

I think if you want the personal touch so to speak, you would be better with a smaller firm rather than the likes of the estate agent brokers or the big firms like L&C.

There is a good amount of equity so that will help, but it does only form part of it. Income and credit history need to stack up.

Devons_best

Thank you again - I seem to have such a lot in my head at the moment I really appreciate your advice!

betmunch

If your tied in until April (I assume 2016?) the why not just leave it until then?


Apply for a remortgage when everyone goes back to work (or a bit later if tied in until the end of April), it should be valid for 3 months so just leave it until April to draw down.


That way you can have the best advice rather than the restricted advice from your current lender.

easilydistracted

My partner and I have just had to find a mortgage that will accept fixed term contacts. From what I can recall, if there is less than two years remaining than the contract had to be renewed at least once and then there were still only a couple of lenders left.

easilydistracted

The lenders were Halifax who I was already with but not a great rate and Nationwide who messed us around no end about their fixed term criteria agreeing. With your other criteria I would definitely agree a broker was useful, wish wed used one ourselves.

Devons_best

fixed term contract has stopped me getting a mortgage so far - retrained so started job in September and won't know for a couple of months if I will get a permanent contract. haven't been in job long enough - have to have had contract renewed and look like will be renewed. Mine won't be renewed as short-term contract as is maternity cover but there may be opportunity of permanent p/t so will have to wait and see and obviously that will be less money that what i'm on.
Will just have to sit tight for a bit and see what happens.

Thrugelmir

Devons_best wrote: »

For example I think we will draw up a financial agreement stating my husband has no claim on the house

Ideally you'll both need to agree to a financial consent order that will put the division of your assets and liabilities into a legal context. Not as simple as your ex assigning you the equity in the house. When he has financial liabilities of his own.

Consult a solicitor and take advice.

Devons_best

Thrugelmir wrote: »

Ideally you'll both need to agree to a financial consent order that will put the division of your assets and liabilities into a legal context. Not as simple as your ex assigning you the equity in the house. When he has financial liabilities of his own.

Consult a solicitor and take advice.

Hi Thank you - yes sorry I was simplifying a bit there - I have consulted a solicitor and will be drawing up either a deed of separation in lieu of divorce and court order (which may take 2 years based on 2 years separation) or as part of the divorce if he is unfaithful (he is already seeing someone else) or on grounds of his unreasonable behaviour (there is a list!!) - either way my priority is to separate myself from him financially and sort myself out -he currently is feeling quite generous to support myself and our 2 children so I am keen to get things resolved while this is the case. There are many other reasons why I have a bigger stake in the house ( I paid deposit, made overpayments, paid off his debts over the course of our marriage and so it goes on.) I'd rather just sort it out amicably and as quickly as possible and for once I am putting myself and the children first.