car finance and new mortgage

JoulesRind

Hello there!

So, we are looking to move house and get a new mortgage. We are currently with halifax and have had our mortgage for over 5 years. We have grwon from 2 people to a family of 4, so it's time to size up a little.

My partner is the main earner and I'm on a zero hours contract which works around my children. I've been doing my job less than 12 months, so my earnings canmt be taken into account.

Therefore, it makes sense for our new mortgage to be completely in my partners name instead of joint. The only loan/finance with both have is the car. It's however under his name.

I have checked and we can't switch it to my name, but we can make the payments go out of my bank account and which I am happy to take responsibility for.

I have looked at personal loans to clear it, but in just my name, it's not an option. On paper I don't earn enough to warrant borrowing the amoiunt needed, but we both know we have more than than enough to cover it and the new mortgage payments we want to make on a new house (which will only be £30 per month more than we're paying currently). We live quite frugally and so we know we can cover this.

We are just wondering if the car finance is in my partners name, BUT goes out of my bank account... does it still count a a liability when he applies for the new mortgage? Or is it possible to then class this as my expense?

Many thanks for any help on this matter!

:j

kingstreet

The account payments come from is irrelevant.

If the agreement is in a person's name and shows on the credit file it will be treated as a commitment for affordability.

What is the source of the deposit?

AnotherJoe

Therefore, it makes sense for our new mortgage to be completely in my partners name instead of joint.
==========
Almost certainly they wont allow this, it will be in both names, since you'll be living in the property. You may find you can borrow less with the two of you, than him alone.

If you dont declare the loan,or attempt to disguise it, that will be fraud. In any case when they look at his bank statements you'd see the money leaving his account to go into yours in order to pay the loan. So its still a commitment.

JoulesRind

Ah I see Kingstreet , so we would need to settle the total amount really then in order to be able to afford the mortgage in the eyes of the lender.

We will have to think of another way of thinking about it.

Almost certainly they wont allow this, it will be in both names, since you'll be living in the property. You may find you can borrow less with the two of you, than him alone.

This is not the case AnotherJoe I'm afraid as I have been at Halifax today discussing these options and they suggested that it would be better for the other half to have the mortgage just in his name. It seems slightly bizarre that a lender would force a couple to have a joint mortgage if they live together. This seems very impractical if wages are significantly different. If that were the case then you'd be assuming that all couples would be up for an equal split of the house if a break up occured even if one person earns 100k plus and the other earns 3k.

If you dont declare the loan,or attempt to disguise it, that will be fraud. In any case when they look at his bank statements you'd see the money leaving his account to go into yours in order to pay the loan. So its still a commitment.

Don't worry, I'm not trying to 'disguise it', I am asking the questions as I don't know if it's literally just worked out based on the financial outgoings. I can more than cover the costs myself. Because I'm on a zero hours contract with work and have been for only 6.5 months, my income won't be considered by halifax (as per my advice direct from halifax), even though I only work part time I usually earn at least £400 p/m. Unfortunately it just doesn't count for anything at the moment. \the car payments are £125 p/m so this is ample to cover the costs. To be honest we just pool both of our earning into a joint account anyway and all bills go out from there, aside from the car which we just left in my parnters account for ease at the time. We would of course be transparent with whatever they required.

Our deposit is the equity from our current property. At my appointment today I informed them that we would repay from the sale, but it leaves us about £10,000 short of what we'd really like to borrow for our 'house for life' house. Halifax can do that for us, so long as the car isn't in the mr.'s name. I have asked the company if we can switch it to my name, but they cant unfortunately. A personal loan isn't going to work either as the interests rates are just too huge as I am considered a low earner. So, I'm just exploring options. Borrowing from somewhere might be the only option for that one. We have 30 months left on the car at £125 p/m (£4600 total cost to repay)

Thrugelmir

JoulesRind wrote: »

We are just wondering if the car finance is in my partners name, BUT goes out of my bank account... does it still count a a liability when he applies for the new mortgage?

On the mortgage application form your partner will have to declare the debt. Not to do so is application fraud and therefore be extremely foolish. As will damage your partners credit file considerably

JoulesRind

Thrugelmir wrote: »

On the mortgage application form your partner will have to declare the debt. Not to do so is application fraud and therefore be extremely foolish. As will damage your partners credit file considerably

Hi there, I must've not worded this very well. I am not trying to decieve. I am simply enquiring if the concerns the have are literally just the financial responsibility of outgoings, in which case i'm happy to take on the debt from my personal bank account. The reason I am asking, is because I don't know what's required exactly here. I am asking for advice on how 'best' to solve our problem, not to be wagged a finger at. Not very helpful...