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Obtaining mortgage offer whilst still in marital home

(12 Posts)
HavingAnOffDAy Thu 15-Jan-15 18:04:46

Hi

I'm in the process of separating from H and we've agreed that he'll buy me out of my half of the marital home & continue living here.

I'm fine with that and have seen a house that I love & would like to make an offer on.

Question is do I need a decision in principle for a mortgage in place before I'm able to do this, and if so how do I get that whilst I'm still named on our current mortgage?

I spoke to our current lender today & they advised they can only make any offers of a mortgage based on my current circs, which means the amount I'd be offered wouldn't be enough, if they'd even offer at all.

TIA

HavingAnOffDAy Thu 15-Jan-15 19:47:12

Anyone?

FishWithABicycle Thu 15-Jan-15 19:54:12

Do you mean that once you've moved out your income will increase, but until you move out your income is lower?
Or do you mean that there's going to be a gap between you moving out and exh giving you the funds from buying you out?

Weloveoptimus Thu 15-Jan-15 19:57:49

Hi there. I received an offer in principle for my mortgage when I was still married to my exh.
I was living in my dad's house with the dc and wanted a mortgage to buy him out of the marital home.
I was very happy they could view my potential situation as a lone parent with a mortgage and help me to move forwards.

AnythingNotEverything Thu 15-Jan-15 20:03:37

I wouldn't view a property until you have a mortgage agreement in principle.

While you're named on another mortgage, you are jointly, but fully liable for the amount remaining on that mortgage. An agreement in principle would take this into account, and tell you what you could borrow in addition. For most people, that isn't enough to buy another property.

Definitely talk to a mortgage lender first.

FishWithABicycle Thu 15-Jan-15 20:20:31

Ah I get it, the bank is taking your existing mortgage debt into account when you won't actually have it any more. Is your exH going to buy you out from assets he already has or by increasing his own mortgage?
If the bank won't budge on this, then if you are generally being civil and he will cooperate in the interests of getting you out. I would suggest that he does whatever he's going to asap and gets your name off the mortgage and gives you the funds - you put the funds in a savings account for the brief time it takes for you to buy, and in the mean time pay him rent equal to the amount of interest you are getting.

However, it all seems a bit mad. Second and subsequent home purchasers get mortgage agreement in principle while they still have the debt of the house they are selling. It must be because there's not a 'sale' in the same sense if exH stays put.

HavingAnOffDAy Thu 15-Jan-15 21:56:42

Fish that's it - our joint mortgage is a debt in the eyes of our lender & therefore it's taken into account when they calculate the amount they'll lend me. I want them to give me an agreement in principle with me as the sole borrower on a new mortgage taking into account the equity H will give me once I'm off the joint mortgage.

But yes - I agree it seems daft because if we were buying another house together then presumably the process would be the same & they'd have to give us an agreement in principle at some point.

FishWithABicycle Thu 15-Jan-15 22:21:55

The issue is that the bank have no guarantee that your exH will cooperate and keep his word when the time comes. If your exH was an utter bastard, you could indeed be left having purchased the new house and liable for the new debt whilst still sharing the liability for the old mortgage. You either need a water-tight contract, with punitive penalty clauses, saying he will buy you out and get your name off the mortgage on or before the date you have to pay for the new house, or he has to actually do it so there's no chance of failure. Does he have agreement in principle to take over the whole of the current mortgage in his own name? That can't be assumed.

bberry Thu 15-Jan-15 22:47:47

Of course they can do an aip with you off the marital mortgage and your deposit...

You would however need to be off the mortgage on or before exchange on your new place

Speak to an independent broker

Has your whys and started the application process to take on the whole debt and capital raise in his sole name? Can he actually raise the funds?

HavingAnOffDAy Fri 16-Jan-15 06:32:23

Well he's done the affordability checks but nothing else yet.

I'll call some independent brokers today - thanks smile

Cabrinha Sat 17-Jan-15 01:38:49

Definitely chat to a broker.
I did exactly this, my mortgage is with Coventry Building Society, but he didn't have to hunt around - just said yeah, that's not a problem.

I had an agreement in principle, based on my salary and deposit, ignoring my then current mortgage responsibility.

I offered, was accepted, and my searches were all done at the sane time as we progressed my XH remortgaging to take over our joint mortgage.

The only thing that wouldn't happen, is Coventry wouldn't release the funds until they had a very specifically worded letter from the other bank confirming I was released.

There were two issues:
- getting a vendor to accept my offer with that added complication. I pointed out it was unusual but less risky than a chain - although it took a while to process the remortgage, my ex also had an agreement in principle immediately. I had our IFA mail the estate agent to confirm it, so they could reassure the vendor.

- it literally came down to the wire and was incredibly stressful trying to get the old bank to send the right letter, literally on the day of completion. That was just down to admin crap on their part!

So my advice is to get off the old mortgage ASAP rather than have it all happening at the same time!

But it's perfectly possibly. That was only 18 months ago, btw.

Good luck!

HavingAnOffDAy Sat 17-Jan-15 08:34:41

Thanks Cab - that's really helpful smile

Glad your sorted

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