Mortgage term is ending, HELP!

CharlotteJT

So I have been to see a free mortgage advisor today as a starting point but I wanted to ask for opinions on here.

Me and my ex-husband got this mortgage in 1997 but unbeknown to me, he got it on interest-only which is why it hasn't been paid down. His name has remained on the mortgage and deeds, but I have been paying the mortgage on my own since we split up. Now the mortgage term is ending, but I still owe £35,000 and I am in the process of getting my ex-husband's name taken off and he will not be getting anything from the house.

Our house is worth £160,000 so have decent equity and a good LTV.

However, I only work part-time so am on a low income. I receive Job Seeker's Allowance (JSA) and Personal Independence Payment (PIP) due to a chronic illness that prevents me from being in full-time employment. We have learnt today that banks don't take JSA into account and not many will consider PIP either. I also receive money/board off my 23 year old daughter but this does not count either. I know that I can afford a repayment mortgage but the banks will only lend me half of what I need.

I was looking at re-mortgaging to a 15 year repayment mortgage. I cannot go higher than 15 years due to retirement age. What can I do?

We don't want to sell the house and equity release is a very last resort.

financegeek

i think you've probably covered most of the options, but others to consider (and discuss with your mortgage broker) could be as follows:

1. how long have you got left on the mortgage? can you overpay as much as possible between now and then to bring the balance down so that hopefully you can remortgage for the balance left?

2. when you say 'our house' do you live with someone now? could they be party to the mortgage to boost the income (e.g. a partner / your daughter?)

3. would your ex consider loaning you money which he could then secure as a charge behind the remortgage in order for his name (and therefore his obligation to the mortgage) to be removed from the deeds? and you could then either save to repay him, or he'd get his money on sale of the property (whenever that may be)

if none of the above are viable and the mortgage company won't allow you an extension, then your only options (afaik) would be either equity release or to sell.

fingers crossed you find a solution OP

minimike2

One would assume that the annual mortgage statements have been sent to you every year at your address? So you would have seen from the statements that the mortgage was on an interest only basis?

It is unlikely you will get him "taken off" as your mortgage lending isn't going to allow him to come off the mortgage given your income situation. It isn't just a case of saying "take him off" I'm afraid. Whilst the mortgage is in place you will have to re-apply for the mortgage in just your name, which as you have already established is going to be difficult. It's all or nothing.

The most likely route out here is to sell and downsize and hope that your ex just lets you take his half of the equity, which he is entitled to if he so wishes.

tlc678910

Hi,
Would your ex consider another joint (but repayment) mortgage? Not sure if this is ok with lenders given that he doesn't live there - perhaps negotiated with your current lender? (? to anyone that knows).

Be careful about a joint mortgage with your daughter. She will lose any help that her first time buyer status gives her, perhaps struggle to get her own mortgage if she is party to yours and would have to pay an extra 3% stamp duty if she bought while still part owning your house.

There are also regular threads on these boards from children that have helped their parents in similar circumstances and later want to/need to liquidate "their share" - at worst seeing themselves as joint owners after up to half the equity as they have gone on the mortgage and "helped to pay it" (with what for now is board money). So if you go ahead with that plan make sure you and your daughter are very clear if she will have any equity and when/how she will be released of the mortgage if she wants to buy property herself.

Good luck

Edit: you mention your bank will lend you half of what you need. That brings the extra money needed down to less than 20k. If you ex or daughter has a good job and credit rating you could explore the possibility of bridging the gap by them taking a personal loan. After a Google a tesco loan for example is illustrated as 20K costing £359 a month for 5 years (with terms up to 10 years advertised) This is riskier option in case they can't always afford it and involved a high degree of trust between You all. You would have to negotiate when and if they would see their money again. They would have to try to see what purposes loans are allowed for but I think "to help out my mum" is more likely than "to buy property" but look into that and seek advice if you consider it.