Going interest only

SVaz

This is for my Daughter,  her partner has unilaterally decided he wants out of family life.  They only bought their house 3 years ago.  
The house will have to be sold,  neither can afford the mortgage alone ( which would need increasing to buy the other’s equity)  as it’s £1300 a month without an extra £40-50k on top. 

 I’d say £90-100k of equity of which she wants 66% as she put up 2/3 of the deposit. 

Will Nationwide allow them to go interest only until the house is sold?
It should sell easily,  it’s close to a great primary school. 

I would think it’s a better option than a payment break as that will just eat into the equity ? 

amnblog

The Mortgage Charter following the 2022 rate increases currently allows 6 months Interest Only without harm to the credit file (which is key)

Keep_pedalling

Did they make deed of trust to reflect the uneven amount they put into the purchase? 

Flugelhorn

Keep_pedalling said:

Did they make deed of trust to reflect the uneven amount they put into the purchase? 

I hope they did otherwise presume it will be 50:50 

Ruggers13

A deed of trust is required for the split, otherwise it will be 50/50 unless the partner agrees otherwise. The mortgage charter is the best option, 6 month interest only which should be enough time to sell the property.

SVaz

If it’s 50/50, he will be paying the ERC and selling fees out of his half!   We gifted her £20k of the £30k deposit.  No trust deed that I’m aware of. 

She’s already told him she expects at least £50k and he’s agreed.  We’ll see. 

I didn’t know about the mortgage charter thanks.  

MWT

SVaz said:

If it’s 50/50, he will be paying the ERC and selling fees out of his half!   We gifted her £20k of the £30k deposit.  No trust deed that I’m aware of. 

She’s already told him she expects at least £50k and he’s agreed.  We’ll see. 

I didn’t know about the mortgage charter thanks.  

Just be aware that we see a lot of posts here that start out with everything relatively amicable and 'reasonable' with the other partner agreeing to a different split from 50/50 right up until the point where they take advice from their own solicitor, as they will have to do, and then it goes straight to 50/50 down the middle and costs shared equally if there is no trust deed...

I hope it works out OK in this case, but there is a reason that we always tell people to properly document and agree all this in a trust deed at point of purchase...

SVaz

He’s always been more than fair with his ex wife,  she left him 10 years ago when their two kids were tiny, he gave her most of the equity in his previous home ( his parents had gifted the deposit!)  and financially supports his children along with having them every weekend as they live quite a distance away. 

He and my Daughter have a 4 year old, together for 7 years.  

I hope there’s no need for solicitors,  they aren’t married and my Daughter is financially independent so child maintainance and the house to sort out. 

Their mortgage fix still has at least a year to run so god knows what the early repayment charge will be,  are there ever circumstances where it won’t need paying?
Selling the bloody house will cost enough as it is. 

SVaz

Does she need to sever the joint tenancy and go tenants in common?