Divorce/Separation Mortgage split, looking for advice

berlioz2000

Hi All, 
We are splitting with my partner, she keeps the family home and I want to move to our BTL(buy-to-let) home. Both mortgages are with Santander. I called them earlier to get consent to reside in the property and remove my partner. The application was declined due to affordability, as they included all our family house expenses on me, because I still joint applicant there. 
It's a bit of a chicken and egg situation.... Any advise on how to handle this? I see to options : 

1) My wife call them to remove myself from family home mortgage. Technically BTL mortgage should be treated with income from rent. So it should be easier to remove. Then I call them and get consent to reside and remove my partner. 

2) I apply for consent to reside jointly, include my partner income and expenses. But I guess it will be painful to split then...cos we will have two residential properties. 

Any advise would be greatly appreciated. 

Caz3121

berlioz2000 said:

1) My wife call them to remove myself from family home mortgage. Technically BTL mortgage should be treated with income from rent. So it should be easier to remove. Then I call them and get consent to reside and remove my partner. 

does she have sufficient income to get a mortgage in her name alone? will she retain all/any equity in the property or will she need to borrow more to buy you out?
If you will be divorcing then both properties would be in the 'pot' to divide (along with other assets)

MWT

berlioz2000 said:

1) My wife call them to remove myself from family home mortgage. Technically BTL mortgage should be treated with income from rent. So it should be easier to remove. Then I call them and get consent to reside and remove my partner. 

She would have to disclose the plan regarding the BTL as it is a known and material change in income...

I would have thought the best approach is to deal with both simultaneously, but will obviously depend on each of you having sufficient income to support the mortgages...

berlioz2000

Caz3121 said:

berlioz2000 said:

1) My wife call them to remove myself from family home mortgage. Technically BTL mortgage should be treated with income from rent. So it should be easier to remove. Then I call them and get consent to reside and remove my partner. 

does she have sufficient income to get a mortgage in her name alone? will she retain all/any equity in the property or will she need to borrow more to buy you out?
If you will be divorcing then both properties would be in the 'pot' to divide (along with other assets)

We had a chat with our mortgage advisor, and yeah we can both easily afford a single mortgage on our own, but the bank wants to handle step-by-step. She won't need to borrow more, she will retain all equity, we both mutually agreed to split two houses and make the process as seamless as possible. Thank you 

berlioz2000

MWT said:

berlioz2000 said:

1) My wife call them to remove myself from family home mortgage. Technically BTL mortgage should be treated with income from rent. So it should be easier to remove. Then I call them and get consent to reside and remove my partner. 

She would have to disclose the plan regarding the BTL as it is a known and material change in income...

I would have thought the best approach is to deal with both simultaneously, but will obviously depend on each of you having sufficient income to support the mortgages...

Thank you! as with any unforeseen circumstances, we make plans and assume it's the best, but we may end up renting this property until the deal ends, get the profit and carry on. Yeah, maybe I should call the bank and see if both mortgages can be dealt simultaneously, it's the same lender. This would be ideal, understand the whole situation and make affordability assessment based on that, but unfortunately, the bank wants to treat one step at the time. So both of us are bound to another mortgage, and have to proof that we can afford both...rather than one

Hoenir

Is it your partner or your wife that you are referring to? 

Family home, suggests that you have chidren. Do you? 

If married have you approched your solicitor about having a financial consent order drafted. The plan as it stands is potentially fraught with risk for the lenders concerned without one. 

berlioz2000

Hoenir said:

Is it your partner or your wife that you are referring to? 

Family home, suggests that you have chidren. Do you? 

If married have you approched your solicitor about having a financial consent order drafted. The plan as it stands is potentially fraught with risk for the lenders concerned without one. 

Hi, my wife, we are married. We do have children. I've booked an appointment with a solicitor to discuss this. Thank you very much for this. We are letting things settle in and sort out the properties first, but need to get the divorce conversation and legal aspect going. 

RJMS

I am sorry to hear your change in circumstances.

Both mortgage applications should be able to be handed side by side. If you are separating and there are children involved for affordability any potential child maintenance that may be due can be used towards this if it is needed. The household expenditure will be modeled on who will be living in the house post completion rather than who is residing their at present. I would recommend speaking to a mortgage broker who can handle both these applications and will have access to a business development manager which helps with trying to get someone to think outside of a tick sheet, which larger banks tend to do only. 

berlioz2000

RJMS said:

I am sorry to hear your change in circumstances.

Both mortgage applications should be able to be handed side by side. If you are separating and there are children involved for affordability any potential child maintenance that may be due can be used towards this if it is needed. The household expenditure will be modeled on who will be living in the house post completion rather than who is residing their at present. I would recommend speaking to a mortgage broker who can handle both these applications and will have access to a business development manager which helps with trying to get someone to think outside of a tick sheet, which larger banks tend to do only. 

Thank you, yeah one of those circumstances you don't expect or plan for Thankfully we are in amicable relationship and both want to have the best outcome for our kids. I spoke with our mortgage advisor and he advised to contact the bank directly. I guess, since no re-mortgage involved, he is not interested, or not dealt with this before. I will ask him again, but he suggested to sort the residential property first as per below.
 
The latest update, I failed on affordability for BTL property since our family home mortgage is still on me(us). The bank suggested it has to be done in steps. So my wife is in contact with the bank to remove me from the residential property first. Once completed, I will apply for BTL to Residential mortgage conversion on my own and should pass, since I will only own one property and remove her. Hope it goes well sequentially, as I understand they can't let me change the BTL until I pass affordability and the only way to pass is to remove me from the other mortgage, which can't happen simultaneously 
Many thanks for the advice   

berlioz2000

I am not sure if this is allowed here, but would anyone recommend a mortgage broker who has access to Santander business development managers to handle both applications side by side? We are ready to complete on the residential property, but once I removed I cannot live in our family home, can't move into BTL until it's converted to residential...really stuck. My solicitors suggest to complete on the same date to avoid any issues later on (eg my wife refusing to be taken off BTL etc) Many thanks