Payment holiday and divorce

metal675

Hi,

We are about to start divorce proceedings and I have a property in joint names for which we plan to do an equity transfer to me. This process is still 8 -10 months away for various reasons. Meanwhile, my fix rate on mortgage ended and I am now on SVR. I did not remortgage yet or do a product transfer with the same lender hoping to remortgage along with the equity transfer and change in title as part of the divorce.

However, to make matters worse I have lost my job recently and to cut down on expenses I am considering a payment holiday. I am hedging that I will get a job in few months. Currently the mortgage is paid solely from my savings.

Can someone please help and advise if -

1. Will taking a payment holiday have any impact on future remortgage or product transfer? Will it affect my credit rating?

2. Given that the divorce proceedings are still 8 months away, I am also considering an option of remortgaging 'now' for 2 years  and then applying for a payment holiday immediately after than doing it on SVR? Is that a better option or makes no difference ? Is that even possible?

Thanks in advance and apologies if I sound naive.

Regards

Thrugelmir

Given your current circumstances. Most appropriate course of action appears to be to opt for a fixed term product from your current lender. At least this reduces your outgoings in the medium term by not being on the lenders SVR. By applying online there's no affordability assessment to concern yourself with.
A payment holiday (Covid 19 aside) would normally have an impact on how lenders will view your application. You could apply for one (after refixing) in line with the current 3 month policy. This would have no impact on your credit history. 

If you are unemployed then remortgaging to a new lender may prove a challenge. 

[Deleted User]

Both borrowers have to agree to a payment holiday and both have to agree to a fixed term change. You say divorce is 8-10 months away. That then doesnt sound amicable ? Also has the other person agreed to an equity transfer? Are their children involved who need to be housed ? 

metal675

Many thanks for your help.

Yes, given my employment situation I am not looking to switch lender as that is difficult. So the choice is to stay on SVR or apply for a product transfer online and then possibly a payment holiday.

I was just trying to asses if the payment holiday taken now after refix will have an impact on the remortgage (joint to sole mortgage due to divorce) probably 8 months later? To avoid remortgaging/ product transfer again in few months, I was looking to stay on SVR.

Also, would employment benefits also have any adverse impact on remortgaging or credit history? I have never claimed them but it is an option I am considering.

Regards

Thrugelmir

Being unemployed for a period of time isn't an issue. People are made redundant all the time as companies fail. 

metal675

Yes, both are in agreement.

Thank you