Exit payment on mortgage

perrylk

Fourteen months ago, my wife and I moved house and ported our Joint mortgage to the new property. 

I have been paying the mortgage and all utilities and outgoings on the new property since we moved in November 2019 as my wife was not working.  She has no health issues and was working when we applied to port the mortgage. We have no children.

In September, my wife and I split up and we are now filing for divorce.  I remain in the property as sole occupier and continue to pay all the bills for the property including her loans for car and motorbike, insurances etc and her telephone. 

As part of the divorce settlement we have to sell the house and split the equity or I pay my wife her share of the equity and remain in the property

I asked my mortgage lender whether I could stay in the property and continue to pay the existing mortgage so that we would not have to pay the early exit fee.  I was told that once my wife comes off the joint mortgage, I would have to apply in my own name for another mortgage.  However, the mortgage they offered me in my name only is £80,000+ less than the existing one. We have had no option but to put the house on the market and it has now sold.

My share of the equity is not sufficient to pay a 15% deposit on any of the houses I am able to afford with the mortgage I have been offered and pay all the selling/buying fees etc.  

It is  not me who wishes to take early exit of my mortgage, but the existing lender which is forcing my hand, therefore I think under these circumstances is unjust that I should have to pay the exit fee

I have an excellent credit rating score, no loans in my name and have never defaulted on the current or any previous mortgages.

Any suggestions please?

davidmcn

perrylk said:

I think under these circumstances is unjust that I should have to pay the exit fee

The lender has no control over the fact you've got divorced or the terms of your divorce settlement - why should they lose out?

SpiderLegs

Agreed. 

The ERC should have been factored into the settlement so you were both responsible for half.

greatcrested

If you pay off a mortgage during the period of a fixed or discounted term there are almost always Early Redemption charges. The lender has provided you with the reduced or guaranteed interest rate in return for your commitment to remain a customer for a stated period of time.

Your reasons for paying off the mortgage during this fixed period are irrelevant - the Early Redemtion charges apply.

The lender is not "forcing my hand". If you work at your marriage and remain as a couple in the property there would be no need to redeem the mortgage early - it was on this basis that you took out the mortage and the change in your circumstances is not the fault of the lender.

Caz3121

perrylk said:

As part of the divorce settlement we have to sell the house and split the equity

is the equity being calculated as house sale price minus selling costs and early redemption fee or are you implying that you are responsible for 100% of the selling costs and early redemption fee from your share?

AdrianC

perrylk said:

Fourteen months ago, my wife and I moved house and ported our Joint mortgage to the new property. 

I have been paying the mortgage and all utilities and outgoings on the new property since we moved in November 2019 as my wife was not working.  She has no health issues and was working when we applied to port the mortgage. We have no children.

So the mortgage was approved based on joint income.

In September, my wife and I split up and we are now filing for divorce.  I remain in the property as sole occupier and continue to pay all the bills for the property including her loans for car and motorbike, insurances etc and her telephone. 

As part of the divorce settlement we have to sell the house and split the equity or I pay my wife her share of the equity and remain in the property

I asked my mortgage lender whether I could stay in the property and continue to pay the existing mortgage so that we would not have to pay the early exit fee.  I was told that once my wife comes off the joint mortgage, I would have to apply in my own name for another mortgage.  However, the mortgage they offered me in my name only is £80,000+ less than the existing one. We have had no option but to put the house on the market and it has now sold.

My share of the equity is not sufficient to pay a 15% deposit on any of the houses I am able to afford with the mortgage I have been offered and pay all the selling/buying fees etc.  

It is  not me who wishes to take early exit of my mortgage, but the existing lender which is forcing my hand, therefore I think under these circumstances is unjust that I should have to pay the exit fee

But it isn't "my mortgage", you singular. It's "our mortgage", you plural, you and your soon-to-be-ex-wife, as joint borrowers.
It absolutely is you plural, the joint borrowers, who are wishing to change the circumstances.
It's not the lender who've changed anything, is it? This change is because you plural, the joint borrowers, have decided to no longer live together.
So, yes, it is you plural who are choosing to close the joint mortgage down.
The lender are already making a concession - offering to waive that ERC providing one of the two joint borrowers remortgages into a single name.
Unfortunately, you don't meet their affordability requirements.

I have an excellent credit rating score, no loans in my name and have never defaulted on the current or any previous mortgages.

That's not the problem here.
The problem here is that the lenders do not think you can afford to pay the mortgage from a single income.
Yes, you have been doing until now... But that's with interest rates at a historically super-low rate.
Following the financial crash, lenders are legally required to consider affordability once interest rates rise. That's the bit your single income will be failing...

Slithery

perrylk said:

Any suggestions please?

Find somewhere to rent.

BikingBud

Sell some of the cars and motorbikes ?

steampowered

Is it possible to port your mortgage?

TN1984

perrylk said:

Fourteen months ago, my wife and I moved house and ported our Joint mortgage to the new property. 

I have been paying the mortgage and all utilities and outgoings on the new property since we moved in November 2019 as my wife was not working.  She has no health issues and was working when we applied to port the mortgage. We have no children.

In September, my wife and I split up and we are now filing for divorce.  I remain in the property as sole occupier and continue to pay all the bills for the property including her loans for car and motorbike, insurances etc and her telephone. 

As part of the divorce settlement we have to sell the house and split the equity or I pay my wife her share of the equity and remain in the property

I asked my mortgage lender whether I could stay in the property and continue to pay the existing mortgage so that we would not have to pay the early exit fee.  I was told that once my wife comes off the joint mortgage, I would have to apply in my own name for another mortgage.  However, the mortgage they offered me in my name only is £80,000+ less than the existing one. We have had no option but to put the house on the market and it has now sold.

My share of the equity is not sufficient to pay a 15% deposit on any of the houses I am able to afford with the mortgage I have been offered and pay all the selling/buying fees etc.  

It is  not me who wishes to take early exit of my mortgage, but the existing lender which is forcing my hand, therefore I think under these circumstances is unjust that I should have to pay the exit fee

I have an excellent credit rating score, no loans in my name and have never defaulted on the current or any previous mortgages.

Any suggestions please?

How long left on the current product? If it is not too long, could the sale be delayed slightly to tie in with the end of the ERC?

hazyjo

Happens to the best of us. Had to sell 3 properties and downsize to something half the size/value.

Lenders have to draw the line somewhere and have calculations to see what they believe borrowers can afford. This isn't something that can be decided on an individual basis.