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can't figure out best way to sort out this mortgage and loan situ?

(42 Posts)
morgagedilemma Mon 06-Mar-17 14:59:40

Some years ago ex and I took out a mortgage on our house, one of those linked to a current account, so you save interest by having money in there and overpaying and so on.

Ours didn't work quite like that because as we paid mortgage we also dipped into reserve (reserve grew as mortgage paid off). We split up a few years ago but it's ended up there's about £19k now owing in total on both the mortgage and the reserve. I've now had a letter from the lender saying that, as we've overpaid, our term ends this month, so I have to repay the full amount.

What I don't know is what to do next. Tried to ask lender, they can't give me advice! Tried to ask a financial advisor, one wanted cash up front to advise, the other didn't understand my mortgage!

All I really want to know is should I remprtgage or even can I, my Ex is o/s at present. Would I need written permission from him?

Or do I use some savings and get a personal loan or borrow rest on my credit card? That's what my DP suggests but he's not an expert so said I should get advice, just can't find anyone to advise me!

BaronessBomburst Mon 06-Mar-17 15:03:02

Does your lender have high street branches you can visit? If so make an appointment with the financial advisor in the branch.

Astoria7974 Mon 06-Mar-17 15:06:25

It would be cheaper for you to remortgage on a fixed 10 year term because mortgage rates are v v low (in the 1-2 per cents) while personal loans and credit cards are much higher (3-10 per cents) You can borrow in just your name to clear joint debt that's fine.

morgagedilemma Mon 06-Mar-17 15:06:33

Not exactly - the actual lender is now part of a larger bank and doesn't exist any more in it's own right. I know from previous issues that the bank don't understand the mortgage we had at all, as they didn't offer it. However it was staff at the bank I spoke to who said they couldn't offer advice.

I could try a branch but I expect they may say the same in person.

Astoria7974 Mon 06-Mar-17 15:07:30

UK regulation means that if you want financial advice you now need to pay for it. It's well expensive and not worth doing for such a small amount. Just do a bit of research and make the decision yourselr

Astoria7974 Mon 06-Mar-17 15:09:19

I work for a bank & early in my career used to handle divorce cases like these all the time. Just make sure that the house ownership is sorted out ie if one of you is taking it on then that reflects on the deeds.

morgagedilemma Mon 06-Mar-17 15:16:58

There's a slight complication in that I'm to pay my Ex £70k in the next 18 months once our DC is 16, at which point he'll come off deeds. This was agreed informerly between us, as we weren't married so no divorce.

Now I have to resolve this other issue what I'd like to do is borrow say £90k and pay him now, do I still not need his agreement to a loan of that amount? House is worth about £450k and I earn 40k so I think that should mean getting a mortgage for 95k isn't a problem.

Or maybe I sort out this issue now and the other money next year?

Dragongirl10 Mon 06-Mar-17 15:19:58

You should just get a small mortgage against the house. As the amount is so small it should be really easy to get a good deal as other poster said 1-2%.

Go on moneysupermarket or another mortgage comparison site and look for the lowest rate, taking into account any arrangement fees, valuation fees etc. Spend some time comparing. Its not really neccessary to use a broker unless the mortgage provider you choose insists, in which case factor in any fees they may charge.

Don't borrow on credit cards this will cost a fortune more, if you want to clear the debt in a hurry, best to get a good low mortgage deal where you are allowed overpayments each year, save what you can and pay off a lump sum each year. This would usually not be a fixed rate.

Or with interest rates so low it is fine to just pay over 10 years, and maybe if you need security of knowing the payments will not fluctuate go for a low fixed rate for 5 years.

Dragongirl10 Mon 06-Mar-17 15:21:56

Just seen your update op..

The same still aplies to the amount of 90k, its still a very small proportion of your house value and only 2x your income so you really should have no problem getting a really good mortgage deal.

Astro55 Mon 06-Mar-17 15:22:15

OP - you are over complicating matters!

Yes you need a mortgage - it's cheap!

But you need to buy OH out of the house first - so see a solicitor- it's the same as buying a house (you and he are the sellers and you are the buyer)

Don't worry about the last mortgage - it's where you are now / what you owe that matters

But it's more important you own the house

rosie1959 Mon 06-Mar-17 15:27:44

If you can't sort this try an Independent Mortgage Broker not a financial advisor they specialise in sorting Mortgages

yoyo1234 Mon 06-Mar-17 15:34:47

As most have said arrange a mortgage to buy your ex out and transfer all into your name.

morgagedilemma Mon 06-Mar-17 15:42:44

Thanks for the advice.

How long is it likely to take to arrange a mortgage? I have to repay the 19k by end of March so don't have much time (understatement).

rosie1959 Mon 06-Mar-17 17:04:27

Mortgage usually take 8 to 12 weeks end of March is pretty unrealistic

morgagedilemma Mon 06-Mar-17 17:12:47

End of March is when I've been told (as of last week) I need to repay the £19k by.

So looks like I won't be able to do that on a mortgage then.

I did ask the lender when I called them last week if the end of March was negotiable and they said not.

Next best bet is interest free credit card I guess?

Astoria7974 Mon 06-Mar-17 17:12:55

OP yes you def need legal advice if you need to buy him out.

Astoria7974 Mon 06-Mar-17 17:13:30

Basically the 19k should be offset against the 70k you owe him. A solicitor will hammer out the details.

rosie1959 Mon 06-Mar-17 17:19:49

Credit card - if you could get that much but be aware may well hinder your application for a Mortgage in the future if you have not paid off before you apply for mortgage

Flisstizzy Mon 06-Mar-17 17:23:33

Get financial advice from an independent mortgage broker ASAP. May cost a couple of hundred quid but borrowing in a cc could be an expensive mistake.

morgagedilemma Mon 06-Mar-17 17:24:18

No, we previously had advice that's how the amount was agreed, and that I'd carry on with mortgage. We hadn't appreciated that the term had reduced by quite so much. Obviously if I had I would have sorted things out sooner. Obviously now my priority is to pay the 19k, as I can't risk getting repossesed or anything.

Ele13 Mon 06-Mar-17 17:24:46

Mortgages can be done in less than 8 weeks, just find a mortgage broker who can get the mortgage company's arse in gear. Ask for an extension of eg a month to the people requesting the 19k, or offer to pay off a chunk with savings etc.

I think you'll find it easier to get a mortgage for 90k than 20k tbh as it's more worth the mortgage cos time.

NotDavidTennant Mon 06-Mar-17 17:25:11

In the first instance I would speak to a mortgage broker. Find one who makes their money through commission from the lender as they generally shouldn't charge you.

We used London & Country and had a good experience with them. You can just phone them up and speak to one of their mortgage advisors for free.

Happyandhungry Mon 06-Mar-17 17:53:29

Easy apply for a mortgage in sole name elsewhere for £90k it will just about be underway by end of March, so your existing lender can't hassle you if the process is underway. This solves your mortgage and loan issue, buying your ex out and getting the new mortgage in your sole name. Simples. And yes i am a mortgage advisor.

FeliciaJollygoodfellow Mon 06-Mar-17 17:58:37

You can remortgage with the same lender or another in a lot less than 8-12 weeks. If you remo with your current lender, then you may not even have to do any affordability checks as they'll accept that you could pay so you can pay.

Softkitty2 Mon 06-Mar-17 18:31:10

Also if you are due to pay ur ex £70k surely you should deduct part of his share of the £19k?

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