Mortgage issues on seperation
Hello All,
I wonder if there is any advice for my current, awkward, situation. 
Just a bit of background story here, bear with me – Myself and my wife split in May last year (after her cheating revelation, don’t you just love them..) which left me in our family home as she moved in with her new love. We were also running a business at the time which has now been closed last week. Separation is happening and we have 2 properties in our names. One is the family home with about £68k equity, the other is a buy to let with little to no equity.
She would love to buy a bigger house with her new love after our separation is settled and things are divided. I would love to get rid of her but there is a problem. At this point in time I’m unemployed with little income. Im aware that to get her off the mortgage would usually mean buying her out which is usually done by refinancing but because as I’m unemployed this is a problem. Also I have my children 50% of the time which makes it even harder. The only positive is that our mortgage is a Woolwich Open Plan mortgage and we have access to £46k of immediate funds of equity.
Any ideas would be appreciated.
Thanks
Derrick
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Property swap rather than sell
Member Since January 2011 - Comments: 12196 - Articles: 1396
10:22 AM, 4th April 2015, About 11 years ago
Hi Derrick
OPTION 1 – both properties are sold and the sale proceeds (net of any CGT and costs) are divided. You will then have money to rent.
OPTION 2 – if your ex is in a position to remortgage one or both properties maybe she could buy you out. This may involve her selling one of the houses. You will then have money to rent.
If you decide to rent you may well need a guarantor, unless of course you can find a landlord who will take the risk of renting to you on the basis that you pay rent in advance. However, please note that a lot of landlords are fearful of rent in advance on the basis that it is often a con used by cannabis farmers to rent houses without full referencing.
.
Member Since May 2014 - Comments: 252
10:47 AM, 5th April 2015, About 11 years ago
I can’t see borrowing more money will work as the lender will almost certainly want their money back anyway when they find out about the split as you have no income.
If you could come to an arrangement with the ex, get both properties valued and sell the family home and if she got her half would it leave you enough cash to do as Mark says and pay 6 months up front on a rented place. In the mean time try and find a job to cover future rent that’s if you can with the children to look after.
You then just might be able to keep the BTL if she will let you, and try to re-mortgage with the likes of The Mortgage Works who offer mortgages without proof of income (I think they only offer this to experienced landlords though). This would only work if it pays for itself and allows for interest rate rises to come, then you haven’t lost everything.
Might be a bit pie in the sky, but just a thought.
Member Since July 2013 - Comments: 1264 - Articles: 1
7:11 PM, 5th April 2015, About 11 years ago
Your best bet is to discuss your options with your solicitor, whatever happens will be enshrined in the divorce settlement. As you have the children quite a lot you could suggest you keep the house until they’re grown up. You also could check with CAB first.
Regards your Open Plan, don’t want to be the bearer of bad news but I also have one of those accounts and just had a letter saying that borrowing against the reserve is being phased out. So if they haven’t already withdrawn the facility, it’s only a matter of time.
Member Since September 2013 - Comments: 104 - Articles: 3
10:52 AM, 6th April 2015, About 11 years ago
Derrick,
sorry to hear of your change of circumstances. One thing that I would advise is to contact your lender as soon as possible to let them know of your unemployment and separation. Lenders are keen to avoid a repossession, and will work with you if your circumstances have temporarily taken a downturn. A switch to Interest Only may be possible until you are back working again.
I know that, as it stands, your wife is still on the mortgage, and as such is jointly responsible for the mortgage, but quite frequently decency goes out the window in such cases. You need to take action to protect your home.