Going for a sole person mortgage - pros and cons?

edited 30 November -1 at 1:00AM in Mortgages & Endowments
10 replies 967 views
MoonandmoonMoonandmoon Forumite
21 Posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hi

My husband and I have a joint mortgage on our property, which we have had for 6 years and never defaulted on.

We can now afford to move, but here's the snag: our current lender will not let us port and borrow more as I am on a probation period in a fixed term contract (the irony being that I took that job to gain a secure income, which they advised me to do). Also, the house we are buying will be bought half with cash so of course logically if we defaulted they would get their money back automatically so we're a massive risk...sigh.

We can borrow against my husbands wage alone. I am of course going to pay my share of the mortgage and get my name on the deeds on the house.

Are there any major pitfalls legally or just generally that you can see?

Thank you

Replies

  • The_JThe_J Forumite
    1.3K Posts
    Joint mortgage is fine, just don't enter your income. No pitfalls.
    The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.
  • Dave_HamDave_Ham Forumite
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    So long as they include you on the mortgage, even at £0 income then this would be fine.

    It will restrict affordability so do check with your existing lender...

    Good luck
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.
    This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thank you both.

    I will try joint.

    Dave Ham - I have checked affordability with our lender and there multiple is too low for a single income. However, other places are affordable with cheaper repayments on the single income so it would be cheaper and easier to make an early repayment on our existing mortgage if we can move.
  • The_JThe_J Forumite
    1.3K Posts
    OK that complicates things, you need to speak to a broker.
    The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.
  • Dave_HamDave_Ham Forumite
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    Sounds as if it would be.

    You will need to check you have no early redemption penalties and also that you are not a specifically low rate which you would be better off coming to a solution with to port....

    ie take the mortgage with you as you suggested initially.

    Its hard to infer the best solution on the limited information provided but this sounds sense..
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.
    This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • There is an early redemption penalty of nearly £2,000.

    They will unfortunately only let us port with an amount of £53,500, which is the multiple on my husbands income alone. They will not port the remaining £4,500 from my income as I am now a risk. We are on a fixed rate mortgage for 3 years at a standard rate, hence why we are having to look at the early repayment.

    We are seeing a broker on Friday. With my husband on a sole mortgage we can borrow up to £65,000, which is what we need and the lower repayments would mean that we would make back the early repayment fee in a couple of years. To be honest we could afford the move if they would let us port the £58K but they won't.

    I can't understand how it is acceptable for us to stay in our current property, which is worth £80K still paying the £58K remaining. But to port that £58K to a new property, which is worth £140K and potentially not borrow anything further is a risk...I understand it would be a 'new' mortgage but if we defaulted and they took control of the new property they would get their money back instantaneously. Sigh...it's all fun.
  • Dave_HamDave_Ham Forumite
    6K Posts
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    If only common sense ruled the world...

    I am with you on the sense front, but unfortunately only one opinion matters and that is your current lender.

    Good luck for Friday - any half reasonable broker should find you a solution here..

    All the best..
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.
    This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thank you.

    He said he would call me back today if there was a problem. No phone call yet so looking positive :D
  • getmore4lessgetmore4less Forumite
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    You need to find £2k to change lender, so only another £2.5k from somewhere

    A couple of 0% CC should do that , get a purchase one as well to give cash flow.

    or try and knock another £k of the purchase price.

    Throwing away £2k pays for quite a bit of interest on £4.5k.
  • ThrugelmirThrugelmir Forumite
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    . But to port that £58K to a new property, which is worth £140K and potentially not borrow anything further is a risk...I understand it would be a 'new' mortgage but if we defaulted and they took control of the new property they would get their money back instantaneously. Sigh...it's all fun.

    That's the last thing a lender wishes to do, and why mortgage lending is priced so cheaply. Lenders lend money not handle property sales. A process which which cost them large sums of money to operate.
    It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." — George Soros
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