Divorce and mortgages
Discussion
I've just been talking to my current mortgage lender, and in order to get my wife off the mortgage of my house I have basically re-mortgage with them, prove I can afford the mortgage I have been happily paying for the past however many years and stump up a total of £660 in fees (consisting of a valuation, final payment fees for closing the existing mortgage, plus legals)
Because I'm the director of a small company and don't have a traditional salary structure, they want to examine the past 2 years accounts of my business. And ONLY the past 2 years. Doesn't matter that, like most businesses, the last 2 years have been pretty lean. They won't consider the bigger picture and look at the company's complete trading history. Ze rulez say 2 years und zat iz zat.
So I could be left in the situation of being deemed not to be able to "afford" the mortgage that I have happily been paying on my own for the past 7 months since my wife moved out, and was incidentally paying for with little assistance from her for years previous to that too.
Anyone have any bright ideas?
Because I'm the director of a small company and don't have a traditional salary structure, they want to examine the past 2 years accounts of my business. And ONLY the past 2 years. Doesn't matter that, like most businesses, the last 2 years have been pretty lean. They won't consider the bigger picture and look at the company's complete trading history. Ze rulez say 2 years und zat iz zat.
So I could be left in the situation of being deemed not to be able to "afford" the mortgage that I have happily been paying on my own for the past 7 months since my wife moved out, and was incidentally paying for with little assistance from her for years previous to that too.
Anyone have any bright ideas?
I can only speak about the process for the 2 high st banks I've worked for but the technical term for what you're doing is a transfer of title. From the lenders point of view it is treated pretty much as a purchase so it is perfectly normal for them to ask for proof of income as ultimately you are going to be responsible for the debt. The lender has no idea what arrangements are in place between partners so it has to be comfortable that you can afford it on your own. The 2 years accounts asked for is an industry standard and the chances are they will look at net profit, dividends paid and directors remuneration. They'll then add these up over the 2 years, divide by 2 to average out over the 2 years and bobs your uncle, that will be what they put down as your annual salary. They will take into account the fact you've had a mortgage with them for x years but ultimately you're going to have to prove you can afford it. To give you an idea most lenders would look at around 4 times income but if you have unsecured debts (e.g loans, car finance, credit cards etc) this will reduce.
With regards to fees etc this is different across the board but a valuation is normal especially with what's happened over the past couple of years. Once again the lender needs to be comfortable with the risk. On top of what the bank charges you you'll also have solicitors fees for the legal side of things but I assume you're already aware of them.
If you happen to have your mortgage with RBS or Woolwich drop me a PM as I know some good people in both.
With regards to fees etc this is different across the board but a valuation is normal especially with what's happened over the past couple of years. Once again the lender needs to be comfortable with the risk. On top of what the bank charges you you'll also have solicitors fees for the legal side of things but I assume you're already aware of them.
If you happen to have your mortgage with RBS or Woolwich drop me a PM as I know some good people in both.
Don't forget the con about stamp duty too - let's say you've got a £300k mortgage on a £500k house, and you agree to give her £50k....you'll pay stamp duty on 50% of the mortgage, plus what you pay her, so £150k+£50k at 1%... even though you've always paid all the mortgage. What a con.
clarkey said:
Don't forget the con about stamp duty too - let's say you've got a £300k mortgage on a £500k house, and you agree to give her £50k....you'll pay stamp duty on 50% of the mortgage, plus what you pay her, so £150k+£50k at 1%... even though you've always paid all the mortgage. What a con.
My understanding of divorce law is that Stamp Duty is not required to be paid if the transfer of equity is as a result of a Court Order. JonRB said:
I've just been talking to my current mortgage lender, and in order to get my wife off the mortgage of my house I have basically re-mortgage with them, prove I can afford the mortgage I have been happily paying for the past however many years and stump up a total of £660 in fees (consisting of a valuation, final payment fees for closing the existing mortgage, plus legals)
Because I'm the director of a small company and don't have a traditional salary structure, they want to examine the past 2 years accounts of my business. And ONLY the past 2 years. Doesn't matter that, like most businesses, the last 2 years have been pretty lean. They won't consider the bigger picture and look at the company's complete trading history. Ze rulez say 2 years und zat iz zat.
So I could be left in the situation of being deemed not to be able to "afford" the mortgage that I have happily been paying on my own for the past 7 months since my wife moved out, and was incidentally paying for with little assistance from her for years previous to that too.
Anyone have any bright ideas?
Don't get married?Because I'm the director of a small company and don't have a traditional salary structure, they want to examine the past 2 years accounts of my business. And ONLY the past 2 years. Doesn't matter that, like most businesses, the last 2 years have been pretty lean. They won't consider the bigger picture and look at the company's complete trading history. Ze rulez say 2 years und zat iz zat.
So I could be left in the situation of being deemed not to be able to "afford" the mortgage that I have happily been paying on my own for the past 7 months since my wife moved out, and was incidentally paying for with little assistance from her for years previous to that too.
Anyone have any bright ideas?
Simon Foster @ www.contractormoney.co.uk may be able to help find you a deal...
Northern Rock told me recently that the criteria they apply can be flexible in these cases for existing customers. For affordability purposes, generally speaking, if you can demonstrate that you have 5/600 pounds left over after everything is paid each month you should be able to find a lender to do it. Speak to Scotal he may be able to help.
Edited by Road Pest on Friday 18th December 10:58
UpTheIron said:
Simon Foster @ www.contractormoney.co.uk may be able to help find you a deal...
Yup, I've used Contractor Money (I thought they'd rebranded as Contractor Financials?) before. I was *hoping* to just stay with my current lender, but if we're looking at a full-on re-mortgage then I'll certainly be giving them a call.
Who is your lender Jon?
Seems like a very odd state of affiars.
If you are not raising funds you should not have to remortgage, and certainly shouldn't need a valuation. With the majority of lenders its a simple form. At worst you might have to stump up for some admin costs.
No way should you be paying stamp to remove someone from the mortgage, its only when you add someone to the home that SDLT might become payable.
I understand that they would wish to check on the affordability, the timing is unfortunate with regards to your accounts, but without knowing the lender its impossible to second guess their attitude, and possible ways to satisfy them.
Seems like a very odd state of affiars.
If you are not raising funds you should not have to remortgage, and certainly shouldn't need a valuation. With the majority of lenders its a simple form. At worst you might have to stump up for some admin costs.
No way should you be paying stamp to remove someone from the mortgage, its only when you add someone to the home that SDLT might become payable.
I understand that they would wish to check on the affordability, the timing is unfortunate with regards to your accounts, but without knowing the lender its impossible to second guess their attitude, and possible ways to satisfy them.
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