Fixed term mortgage, splitting up question

A_N_R

We have a 3 year fixed HSBC mortgage, we are splitting up and agreed that I buy my partners share of equity from my savings.

Would HSBC verify my standalone affordability for removing my ex partner with it being an existing fixed term mortgage? My current part time wages would not be sufficient for such affordability checks but my savings would more than cover all payments for the remainder of the term, would a lender accept this? And if not would a refusal to lend still result in the early repayment charges? And finally, would they perhaps accept a close family member as a guarantor?

Thanks for any help and advice, I just want to understand where I stand before approaching HSBC as they have no guidance on their website.

Anne

MWT

I do hope you have taken some advice regarding proper documentation of whatever separation agreement you reach, and also the calculation of any payments being made. Everything is usually amicable and reasonable until something changes and you don't want there to be room for problems in the sequence of events needed to remove your partner from the deeds and the mortgage, nor should you agree an amount for their equity without getting a second opinion on the calculation...

You are not in danger of triggering the early repayment charge by talking to HSBC as their default position is that you both remain on the mortgage for the full term, unless and until you can show them that you can meet the affordability requirements for the mortgage you already have...

Generally, no, savings do not help towards affordability beyond your option to use them to pay down the mortgage, but take care there as there are limits on how much you can do that without triggering the ERC.

When you say you have enough savings to cover the payments for the remained of the term, are you taking about the remainder of the 3 year fix, or the actual full term of the mortgage, which is presumably rather longer?

I am sure one of the brokers may be able to comment on the possibilities for using a guarantor with HSBC and of course talking to a broker to understand your options to finance the size of mortgage you need should it prove necessary to move from HSBC would be a good idea anyway...

mdj1876

I went through this process a few years ago.

Unfortunately, it's the same as a whole new mortgage application (or was with us) for a transfer or equity. The mortgage product and term remained the same, it was just to discharge one from the mortgage. You have to go through all the standard affordability checks and savings didn't count for anything for us. 

mdj1876

And no, very rare you can add a guarantor to a mortgage.