Raising £85K for a divorce settlement

nexsuperne

Hi, I'm not sure quite where I should put this post, so please bear with me

I am in the process of going through a divorce. There is £110K left on the mortgage. The property is valued at £280K (by Estate Agents), leaving about £170K equity. We are going to do 50/50 with the kids to remove any need for maintenance payments either way.
So I am looking for a way to borrow £85K to pay my ex off. She will take the money, get a loft conversion done at her dads home, which will then give the kids a room each, my ex a room, my ex's dad a room plus one as a spare. My ex will probably have £40-50K left after the loft is complete.
At the moment, we are both company directors, both on £680 a month, plus I get the mileage allowance (as I drive my car for work), and she gets the Child tax credit for 2 children under 12.
Because we are running the company as efficiently as possible, it means that on paper, my wages are under £10k per year. There are then dividends, and the mileage allowance gets me to somewhere near £25K.
Most lenders want to see big salaries, which is not how it works when you are a company director, as all they will see is <£10K.
I am looking at a loan secured against the property for the £85K, as I will not be able to get a 2nd mortgage for love nor money.
Has anyone got any recommendations or other ideas please? I don't want to sell the house, as I can afford it, and it gives the children some stability and familiarity at this time.

Thanks in advance

enthusiasticsaver

If your income is around of £25k I am not sure you will find a lender who will loan a total of £195k (including the current mortgage which will also be taken into account). Are you sure you can afford this? A mortgage broker is your best bet but unless I am missing something it looks like your income falls very short to sustain that sort of lending.

Normally the lending multipliers are around 4 times income so way short of the amount you need.

nexsuperne

My income changed this year, as the company is now busier than it has ever been. I can easily show this as wages and pay the income tax (instead of corporation tax) on that. The problem is that most lenders want the SA302 from the last 2 years, and my current increased income won't be taken into account.
I have a friend that is renting her own place. Would another option be to get that friend to move in and buy X% of the property for £85K? They would be financially better off for not paying rent at an extortionate rate, and I would get to keep the home.

antrobus

nexsuperne wrote: »

....
I am in the process of going through a divorce. There is £110K left on the mortgage. The property is valued at £280K (by Estate Agents), leaving about £170K equity. We are going to do 50/50 with the kids to remove any need for maintenance payments either way....

Sell the house. Use your £85K as a deposit on a smaller house. Or rent.

It's the easier option.

nexsuperne

Rent is just putting money in the bin. £85K deposit would be a start on somewhere new, but I like the house, and it has taken me 10 years to get it from the state it was in when I bought it to what it is now.

ciderboy2009

nexsuperne wrote: »

Rent is just putting money in the bin. £85K deposit would be a start on somewhere new, but I like the house, and it has taken me 10 years to get it from the state it was in when I bought it to what it is now.

Apologies for being blunt but, regardless of the above, it seems to me that you simply cannot afford to buy it.

System

nexsuperne wrote: »

Rent is just putting money in the bin. £85K deposit would be a start on somewhere new, but I like the house, and it has taken me 10 years to get it from the state it was in when I bought it to what it is now.

Rent isn't money in the bin, it is providing a roof over your head. You may like the house but you can't afford it even on the new higher income.

Working_Mum

I am self employed and Handelsbanken have a good reputation for being non computer lead lending providers - they take a pragmatic approach and see beyond the figures - your current and business accounts will need to be in tight order - the interest rates won't be the lowest on the market but for a lot if us self employed types that isn't anything new!!

pelirocco

And what would happen if your friend wanted out ? , back to square 1

SuperPikachu

What if you were to not get divorced and keep your house?

Potbellypig

If you earn £25k a year, your chance of getting a loan for that amount is next to none. I assume you're taking more out of the business than what it's saying on paper? Unfortunately, you can't have it both ways.

And renting isn't putting money in the bin. You'll be paying a fixed amount every month to live somewhere.