Getting second mortgage

Sausmeister

I bought a flat in 2007 with a girl. 10 years later we are no longer together, she lives there with my children. There is £152k to pay against a 290k property. She currently is paying he interest, I pay her money for the children’s maintenance. Not that it matters, but she ended the relationship and I was forced to leave due to her unreasonable behaviour, I didn’t choose to walk from my kids and my home.

I want to buy again but am worried no one will lend to me. I earn £40k and live with my new partner.

Will the bank see that I have a £150k debt and refuse me outright? Will they consider that someone else is living in and paying for the mortgage there with equity at 50%.

My new partner has high equity in her place and earns well, will they simply look at our joint earnings and assess our ability to repay?

I can’t make my ex sell, and to be honest it’s my kids Home so I don’t want to. I don’t even care about the equity I have in the place, but the ex doesn’t earn enough to remortgage the place on her own, but that means I could be stuck on the deeds for another 15 years until ahe has to sell it.

Any suggestions welcome. I’m 43, I have an ok income and one last opportunity to get back in the property ladder but fear it cannot happen due to circumstances out of my control.

kingstreet

Your new mortgage affordability will be affected by your liability for the current mortgage and the maintenance payments you make.

Neutrinno

Yes your current mortgage will be used against you for affordability purposes plus maintenance, regardless of who on the mortgage is making the payment. It is likely you'll also be liable for an additional 3% surcharge on stamp duty for purchasing a second property, unless you apply for an exemption from HMRC. To do this, you will need to provide legal evidence that you’re formally separated from your ex-partner or divorced.

Sausmeister

Ok thanks, for the most part that what I expected. So it’s up
To us jointly to demonstrate that we earn enough to merit the new mortgage whilest the 152k fully taken into consideration.

I actually pay nothing toward the mortgage at all
Now, she lives there, she can keep the lot for all
I care. My maintenance payments are spent as she wishes but I pay nothing specifically against the debt and the flat has 50% ltv so the lender is not at much risk. But I understand this will be ignored and my borrowing capacity will be based on owing the full
Amount.

This probably wouldn’t be a problem is my new partner is a very high earner currently and combined earnings make the 152k fairly insignificant. But she is about to take redundancy and go
Self employed which opens a new can of worms as regards to demonstrating affordability to repay whilest I have the 152k against my name already.

Thankyou for mentioning the exemption however, if an exemption exists do separated partners (and it’s right that it should) then I would imagine I will have little difficulty in proving the case. It’s a sliver of good news.


Mean while will speak to a broker and see what numbers they can offer based on current and future situation. Cheers

Thrugelmir

Sausmeister wrote: »

Thankyou for mentioning the exemption however, if an exemption exists do separated partners (and it’s right that it should) then I would imagine I will have little difficulty in proving the case. It’s a sliver of good news.

A mortgage is a joint and several liability. To remove yourself the mortgage needs to be discharged. Until then the liability remains. Irrespective of your current circumstances.

SDLT_Geek

Sausmeister wrote: »

Thankyou for mentioning the exemption however, if an exemption exists do separated partners (and it’s right that it should) then I would imagine I will have little difficulty in proving the case. It’s a sliver of good news.

The SDLT rules about a share in a property not "counting against you" for the purposes of the higher rates of stamp duty land tax might not apply in your favour in this case. They only help you if you were married or in a civil partnership and there is a "property adjustment order" in favour of another party who lives there. Sorry to bring bad news.

Neutrinno

Thrugelmir wrote: »

A mortgage is a joint and several liability. To remove yourself the mortgage needs to be discharged. Until then the liability remains. Irrespective of your current circumstances.

I think he's replying to my comment about exempting himself from additional 3% stamp duty.

Sausmeister wrote: »

But she is about to take redundancy and go
Self employed which opens a new can of worms as regards to demonstrating affordability to repay whilest I have the 152k against my name already.

If she is about to go self-employed then lenders would require at least 1 year of self-employment history behind her.

Sausmeister

Read all the additional replies and Read up a little from Hmrc.

Aye, there is no good news. Any hope of avoiding the extra 3% looks slim, perhaps if I go to court to force her to sell (something I never wished to do) then an order from the courts agreeing but also delaying the sale until the children are grown, as they surely would, might help. It would certainly provide evidence which meets the spirit of the law, I can get legal advice about that should i miraculously reach that stage.

Once my partner is self employed, a year or more of earnings may be enough to persuade a lender to provide adequate funds, this path is likely the only hope as my own earnings will not be adequate while I remain liable For the previous home.

All comes back to me signing on the dotted line 10 years back with someone who now is not in a position to dissolve the agreement. I’m ducked basically

Edi81

Your other issue is that your former home is on an interest only mortgage. If not, sorry but that’s the way it reads.

What happens at the end of the term? Is your ex going to be in a position to pay it off or are you going to be stuck with it.

You really need to try and get out of the first mortgage by your ex buying you out and taking on a mortgage in their name.