FINANCIAL CONSIDERATION - ADDING NAME TO MORTGAGE - STAMP DUTY

Hadwin_2

I am getting divorced and my ex wants to come off the mortgage of the family home (she is buying her own house).  My brother-in-law(BIL) has said he will come on the mortgage with me to meet the affordability criteria needed by my mortgage provider, staying on my current tied-in mortgage.  I have been paying the full mortgage, myself, for the last 2.5 years.  My solicitor has now said to me that because my BIL has to be registered at Land Reg, as having a financial consideration in my home, that I will now have to pay £5,000 Stamp Duty.  My BIL has his own home and in effect is only a guarantor, but my mortgage provider doesn't accept guarantors and I'm tied into this mortgage for another 18 months.
This doesn't seem fair.  Is the information I'm receiving correct.  What can I do?
Thank you in advance.
 

blue_max_3

If you have owned it for at least 2.5 years, you must have some equity built up. Is there a settlement due to your ex? I would suggest you do nothing until the divorce has been settled. That takes some time and by then you may be in a better position to meet the affordability.
Other things to consider - if you have any money saved, you could pay off some of the mortgage (usually up to 10%). And maybe extend the term to reduce the monthly payments. And finally, consider remortgaging to a company that might accept a guarantor. Finally, maybe the ex could pay off some and you swop another asset, such as car or pension. But don't do any of that until you have the divorce finalised or you may put yourself in a difficult position.

Hadwin_2

blue_max_3 said:

If you have owned it for at least 2.5 years, you must have some equity built up. Is there a settlement due to your ex? I would suggest you do nothing until the divorce has been settled. That takes some time and by then you may be in a better position to meet the affordability.
Other things to consider - if you have any money saved, you could pay off some of the mortgage (usually up to 10%). And maybe extend the term to reduce the monthly payments. And finally, consider remortgaging to a company that might accept a guarantor. Finally, maybe the ex could pay off some and you swop another asset, such as car or pension. But don't do any of that until you have the divorce finalised or you may put yourself in a difficult position.

Hi blue_max_3 thanks for your response.  We've owned the property for over 4 years and my ex has had her share of the equity in the house, which she has used to purchase her new house.  The problem is if she doesn't come off my mortgage soon she will be liable for second home stamp duty.  
It'll cost me £6,000 early redemption if I move mortgage or £5,000 to stay.  It seems like throwing money down the toilet either way.

blue_max_3

Hadwin_2 said:

Hi blue_max_3 thanks for your response.  We've owned the property for over 4 years and my ex has had her share of the equity in the house, which she has used to purchase her new house.  The problem is if she doesn't come off my mortgage soon she will be liable for second home stamp duty.  
It'll cost me £6,000 early redemption if I move mortgage or £5,000 to stay.  It seems like throwing money down the toilet either way.

Well, until you are divorced, you don't have individual assets. They are all joint. How far has the divorce progressed? But if you take the view that your ex's property is hers, she will have paid additional Stamp Duty and not you.
I'd expect your ex to do what it takes to come off your mortgage. That may be giving you the cash to afford the property if that is what is required. If she can't, you can sit tight.

Hadwin_2

blue_max_3 said:

Hadwin_2 said:

Hi blue_max_3 thanks for your response.  We've owned the property for over 4 years and my ex has had her share of the equity in the house, which she has used to purchase her new house.  The problem is if she doesn't come off my mortgage soon she will be liable for second home stamp duty.  
It'll cost me £6,000 early redemption if I move mortgage or £5,000 to stay.  It seems like throwing money down the toilet either way.

Well, until you are divorced, you don't have individual assets. They are all joint. How far has the divorce progressed? But if you take the view that your ex's property is hers, she will have paid additional Stamp Duty and not you.
I'd expect your ex to do what it takes to come off your mortgage. That may be giving you the cash to afford the property if that is what is required. If she can't, you can sit tight.

My issue isn't really with my ex, as it's what we bother want.  I'm just trying to find out about adding another person to my mortgage, who is not gaining any financial benefit but rather potentially a financial liability and me having to pay £5,000 for him to do that.  Our solicitors are saying that I should pay Consideration Stamp Duty(SDLT) on 50% of the mortgage.  Why not 1% or 100%.  Could I not say SDLT 1/6th of the mortgage as that how short I am on affordability?

RedFraggle

Does your existing lender offer joint applicant sole proprietor mortgages? That is different to a guarantor. 

Hadwin_2

RedFraggle said:

Does your existing lender offer joint applicant sole proprietor mortgages? That is different to a guarantor. 

Thanks for your response.  I've just asked my mortgage company and they don't have that facility.  They said we'd need to be on the deeds and the mortgage.