Remortgage to Buy Smaller Property (Divorce)

DancingBadger

Asking for a friend (yes, really):

Property owned outright currently valued at £1.2m.
The intention is to sell the property and split the proceeds 50/50 to enable the parties to buy their own mortgage-free homes.
However, the husband has jumped the gun and already found a house, and needs to raise circa £500k to buy it, whilst leaving his wife in the matrimonial home until such time as the rest of their assets are divided.
He's 73, effectively retired, but still economically active in executive roles, whilst drawing down a good pension (and paying 40% tax)
Does anyone know if a lender would consider him? 

macman

40% tax doesn't tell us what his actual income is, so you'd need to be more specific.
Bear in mind that on a 25 year term, he'd be 98 at the end.
Why does he feel the need to rush into this and indebt himself to the tune of half a million quid?

DancingBadger

macman said:

40% tax doesn't tell us what his actual income is, so you'd need to be more specific.
Bear in mind that on a 25 year term, he'd be 98 at the end.
Why does he feel the need to rush into this and indebt himself to the tune of half a million quid?

His drawdown is £8k per month, so his net private pension is around £60k pa, Additionally, he has SP of around £10k pa.

The rush is he's found a property he really wants to buy, and they're keen to separate, but the matrimonial home isn't yet on the market, nor have they reached a financial agreement, other than they both want to move on from their current property and split the proceeds 50/50.

He's not looking to saddle himself with long-term debt; just a bridging loan or a loan secured against the matrimonial home until it's sold.  His wife would be happy with that arrangement in the short term as it's the means to an end.

The problem seems to be his age, but he would be looking to repay the loan within a year. 

mark5

Wouldn’t the wife be taking 50% of his drawdown pension though unless she has a similar pension herself? 

Mutton_Geoff

Assuming because of his age, they have been together for a while, another few months won't matter. Unless he wants to get busy on Match.com etc.

It's a daft idea because once he leaves the marital home, there will be no incentive for her to sell and downsize from the comfy mansion.

A friend in a similar predicament. His ex wife still in the house, apparently unable to sell, for the last 10 years. He's lived in rented ever since  unable to buy his own place.

He needs to stay put and in her field of view as a constant reminder to sell up and move forward.

silvercar

At the age of 73 I’m surprised he’s got the energy for a divorce. Seems he is a bit impetuous. He needs to wait until the assets are divided and knows what pension he will keep and the house is actually being sold.

Marriage counselling could work out a lot cheaper.

macman

Once his wife takes some financial advice of her own then there is no way that she would agree to any loan secured against the matrimonial home until there is a financial settlement. This is just unwise and unrealistic in so many ways.
On £8K he can well afford to rent somewhere very nice until the property is sold.
If he needs to draw down £8k a month at present then he must enjoy quite a luxurious retirement.

TBagpuss

It's possible to get an equity release mortggeto buy a new property, as wellas on an existing one, so that may be an option for him, rather than securing it against the matrimonial home. 

It can be repaid early although I belive the ERC are typically higher than with conventunal mortgages 

However, if he spaks to a psecialist broker then I would expect that he would be able to get borrowing of some kind .
The more sensible option would be for hm t orent until the family home is sold or his wife buys him out,  or indeed for them too both stay in the famioy home short term. 

DancingBadger

Thanks for all your responses.

In a nutshell: He's 73 acting 53, they've done the counselling bit, this will be his third divorce where he is the Respondent (fidelity isn't his strong point), solicitors are instructed, although it's clear he's trying to work to his own agenda outside the law. His first wife has told the wife she'll need a forensic accountant to unearth all his assets.  (Tongue-in-cheek question: How do you assess the profit from selling a company with a £35 million turnover 270 employees, and how do you find where he hid it?)

The rush is that he's found a property he really wants to move into, which is currently vacant.  The seller isn't interested in letting him rent it until the divorce is finalised.

His wife has no interest in remaining in the marital home and wants to move on ASAP while protecting her legal rights.  She's prepared to ignore some of his other assets (property in Spain and boat in the UK, and God only knows what he's squirrelled away) and just go for a split of the property and some of his pension. 

The problem is obtaining a short term loan to enable him to move out (which they both want) before they kill each other.

silvercar

DancingBadger said:

Thanks for all your responses.

In a nutshell: He's 73 acting 53, they've done the counselling bit, this will be his third divorce where he is the Respondent (fidelity isn't his strong point), solicitors are instructed, although it's clear he's trying to work to his own agenda outside the law. His first wife has told the wife she'll need a forensic accountant to unearth all his assets.  (Tongue-in-cheek question: How do you assess the profit from selling a company with a £35 million turnover 270 employees, and how do you find where he hid it?)

The rush is that he's found a property he really wants to move into, which is currently vacant.  The seller isn't interested in letting him rent it until the divorce is finalised.

His wife has no interest in remaining in the marital home and wants to move on ASAP while protecting her legal rights.  She's prepared to ignore some of his other assets (property in Spain and boat in the UK, and God only knows what he's squirrelled away) and just go for a split of the property and some of his pension. 

The problem is obtaining a short term loan to enable him to move out (which they both want) before they kill each other.

You don't. You maintain that you assume he has X given his lifestyle extends to Spanish property and a boat, plus whatever lifestyle he maintains at the moment. Leave him disprove it.

If she is the third wife, then it may be that he came into the marriage with a lot of equity to start with, so it may not be unreasonable that she doesn't get 50% of everything. 

DancingBadger

silvercar said:

DancingBadger said:

Thanks for all your responses.

In a nutshell: He's 73 acting 53, they've done the counselling bit, this will be his third divorce where he is the Respondent (fidelity isn't his strong point), solicitors are instructed, although it's clear he's trying to work to his own agenda outside the law. His first wife has told the wife she'll need a forensic accountant to unearth all his assets.  (Tongue-in-cheek question: How do you assess the profit from selling a company with a £35 million turnover 270 employees, and how do you find where he hid it?)

The rush is that he's found a property he really wants to move into, which is currently vacant.  The seller isn't interested in letting him rent it until the divorce is finalised.

His wife has no interest in remaining in the marital home and wants to move on ASAP while protecting her legal rights.  She's prepared to ignore some of his other assets (property in Spain and boat in the UK, and God only knows what he's squirrelled away) and just go for a split of the property and some of his pension. 

The problem is obtaining a short term loan to enable him to move out (which they both want) before they kill each other.

You don't. You maintain that you assume he has X given his lifestyle extends to Spanish property and a boat, plus whatever lifestyle he maintains at the moment. Leave him disprove it.

If she is the third wife, then it may be that he came into the marriage with a lot of equity to start with, so it may not be unreasonable that she doesn't get 50% of everything. 

I would agree, but her solicitor says 17 year marriage is considered to be "long" and so she's entitled to a 50/50 split. Also, when they got together, he persuaded her to sell her house and put the proceeds into their "pot" (although I have no idea what that means).