Ex wife took out new mortgage product without consent

cargrass

Hi, myself and my wife separated years ago. The mortgage for the property is in both our names. My employment circumstances have change since the original mortgage and I am no earning far less. A new mortgage product has been taken out (staying with the same lender) as our old one ran out. I was informed of this by email but did not sign anything. The new repayment fees are crippling as I am not earning what I used to. 

I find it odd that a lender would not enquire about current earnings when signing up to a new product. If I inform them of our new situation could they retract their mortgage offer?

Emmia

As this is  a "renewal" with the same lender, rather than an entirely new mortgage the same checks are not made, it's a pretty easy and straightforward process. 

You'd only get the full checks by taking out a completely new mortgage e.g. by borrowing more or switching to a new lender.

Presuming it was previously on a fix that had expired, what's the difference between the "new" mortgage and the SVR you'd have moved onto in terms of monthly payments when your fix ended? The new fix (whilst more than you can afford really) may be cheaper than the SVR.

Perhaps it's time to formalise that separation and properly divorce, going your own ways financially.

amnblog

Be careful not to shoot yourself in the foot here

Exodi

cargrass said:

A new mortgage product has been taken out (staying with the same lender) as our old one ran out. I was informed of this by email but did not sign anything. The new repayment fees are crippling as I am not earning what I used to. 

I'd imagine the low interest fixed rate product you were previously on was coming to an end. By not renewing to a new product, you would have fell onto the lenders SMR. If you think the new repayment amount was crippling, I think you would have had a heart attack going onto the lenders SMR (which would have happened if you did not apply for a new fix). As they say, careful what you wish for or it may just come true.

As an example: a £250,000 mortgage with 20 years remaining.

At 2% (a common low interest rate we all enjoyed a few years ago): £1,265 p/m
At 5% (a common interest rate on todays mortgages): £1,650 p/m (+£385)
At 8% (a common lenders SMR): £2,091 p/m (+£826)

cargrass

Thanks for your response. The difference is £300 a month. Not a huge amount unless you don’t have it. Been trying to formalise the separation for some time but it’s been a slow and expensive process. There are children involved that live 50/50 with both of us. I’ve been happy to maintain the family home for them to live in but it’s becoming very difficult to afford the mortgage repayment. 

dunstonh

 A new mortgage product has been taken out (staying with the same lender) as our old one ran out. I was informed of this by email but did not sign anything. The new repayment fees are crippling as I am not earning what I used to. 

Often you do not sign anything with product transfers.

I find it odd that a lender would not enquire about current earnings when signing up to a new product. 

A product transfer doesn't need re-underwriting.  Its a continuation of an existing mortgage but on a revised deal.

 If I inform them of our new situation could they retract their mortgage offer?

Most lender's product transfers are better than new business deals.  So, why would you want to put  yourself in a worse situation?

Hoenir

You've no grounds for complaint to the lender. There's no mortgage. The original loan still exists. Your ex has simply secured a fixed rate of interest for a period of time. Failure to doing so would have resulted on the loan moving onto the lenders Standard Variable Rate. 

If the children are living 50/50. Then something has to give if it's running two households thats the real issue. Downsizing one property perhaps? 

la531983

Not quite sure what the OP is wanting to achieve here. She has done you a favour. 

Emmia

I think the OP and their ex, probably need to sit down and discuss the finances, including potentially selling the family home, as it seems it's not affordable anymore. 

Dragging out divorce only benefits lawyers, not the OP, not the ex and definitely not the kids. 

ACG

If she had not taken out a new product, the repayments would have been higher. 
Unless you were hoping the higher repayments would force her hand so to speak, she has probably done you a favour.

If you were hoping it would force her hand, you could speak to the lender and ask how it has happened as you never agreed - they may only need one person to agree to it, they may want you to take it up with your ex or it could be that she has forged your signature (all of which I have seen when I worked for a bank). 

Exodi

As everyone has said:

Emmia said:

The new fix (whilst more than you can afford really) may be cheaper than the SVR.

amnblog said:

Be careful not to shoot yourself in the foot here

dunstonh said:
why would you want to put  yourself in a worse situation?

Hoenir said:

Your ex has simply secured a fixed rate of interest for a period of time. Failure to doing so would have resulted on the loan moving onto the lenders Standard Variable Rate. 

la531983 said:

Not quite sure what the OP is wanting to achieve here. She has done you a favour. 

ACG said:

If she had not taken out a new product, the repayments would have been higher. 

I would seriously have a long think about the emotion-fueled idea of calling up the lender and arguing that you did not agree to be moved to a new fix (even if the ex may have mislead the lender into believing you did).

Unless the reason is because you want to sell the house relatively quickly, as everyone has said, the default position would have been moving to the SMR, and your +£300 on your old payment could easily be +£600. Don't cut off your nose to spite your face, your ex has probably done you a favour. Interest rates have shot up for everyone, there is likely no spite involved in this rise.

Solicitors take a lot of the blame in lengthy divorce proceeds, but perhaps the biggest reason is uncooperative (ex) partners. Every action is interpreted negatively and offensive, as I think is the case here.

cargrass said:

Thanks for your response. The difference is £300 a month. Not a huge amount unless you don’t have it. Been trying to formalise the separation for some time but it’s been a slow and expensive process. There are children involved that live 50/50 with both of us. I’ve been happy to maintain the family home for them to live in but it’s becoming very difficult to afford the mortgage repayment. 

Has mediation failed? The process can be quick if you can personally reach an agreement between you both and not have both of your solicitors arguing for 100% of the assets. I'd suggest being open-minded, everyone coming to this forum has the view "I'm being reasonable, my ex is the one demanding too much!", which can't possibly always be true.