Finances on separation

[cheeseandchives]

NC for this...

I'm at the stage of trying to 'get my ducks in a row' to separate. :-( I know I should get some sort of financial advisor but want to try and do as much as possible myself to save money. So the house is worth about 250k. Mortgage of c100k still to be paid off. So, conveyancing fees for two of us selling, then buying two separate properties, around £15k, maybe? Leaving us 85k profit between us, yes?

So, call it 40k that I have to put towards another house for me and DC. I earn 37k. What kind of value of house do you reckon I could afford up to??? I know it's a bit of a how long is a piece of string question, but any advice most welcome. I'd really rather not go up to a four-figure monthly mortgage but I suppose that's on the cards...

And what is the deal with council tax when you're a single person? Am I right in thinking there should be a bit of a discount?

Please tell me if there's any significant outgoings that have completely slipped my mind! And also how you did all this pre-budgeting if you were in the same position? Spreadsheet? Thank you so much

Oh, bugger, I've posted in the wrong topic. Could I please get this moved to Divorce/Separation, MN powers-that-be?? @mumsnet

Hi OP

We've done this now.

Yes to the spreadsheet! It doesn’t have to be particularly high tech, just list all your current bills and then estimate them for a new house - lots won’t change, such as house insurance, water bills if not paying by meter etc - but some will such as council tax for which you’ll get a 25% discount

You can usually borrow about 3x salary - some lenders will give you more but I found it difficult when I separated because of the dependent children. I used a mortgage broker to get me a deal because he knew who was most likely to look favourably at my situation; you don’t pay them til the end and often they are just paid via commission from the lender. Make sure you use an independent broker not one tied to one lender :)

I used a mortgage broker and he was great. You get 25% council tax discount as a single person. And yes to writing down all the bills on a spreadsheet

Thank you - so borrowing 3x salary = £111 + 40 = £151k - do you guys think this would be the maximum I could afford, housewise? That really does suck :-(

Am going through the same & the financial side of things is grim. Can't afford to rent or buy round here on that. Have to move kids schools etc. Urgh.

Ok unless i read your original post wrong house £250 less fees £15k less oustanding mortgage £100k. That leaves £135k to split which is £67.5k each. The split won't necessarily be 50/50 it depends on a number of factors. I just walked away with a 90% plus share of equity as I gave up rights to my husbands pension, spousal maintenance etc...also some mortgage companies take child maintenance into account.

As the last poster mentioned your first post suggests you have 150k equity in the house, so giving you a higher deposit of circa 65k after the fees you mentioned.

You should also be able to get more than a 3x salary mortgage if you need it, will depend on the lender. I found HSBC to be reasonable on this - there is a rough online calculator you can use.

With a larger deposit you should also get a decent rate mortgage - 75% LTV rates aren't bad.

Suppose you wanted a property if 200k, so 65k deposit and 135k mortgage - sounds possible but you would have to check (also if you have other debts commitments etc the amount you can borrow would obviously decline)

Repayments would also be low on that because interest rates are so low at the moment - you can fix for 5 years for approx 2% at the moment which would lock in low rates for that time period and give you some certainty of repayments over that period - do factor in the possibility of interest rate rises in the future tho.

All imo, I'm not a professional advisor so do take some advice or do more research, cheers

Do you have a family member who'd be willing to join you on the mortgage? So their income counts towards how much you can borrow, and they're liable to make the payments if you don't. This is usually acceptable from the provider's point of view.

You might be able to indemnify them against having to actually pay it, if they're concerned about that, but get a solicitor's advice.

Good luck

I recommend speaking with first direct. Although i work in finance so had a bit of a head start with interest rates etc. they were helpful and I managed to get roughly £100k extra to pay off wife for only £70 a month more than my current mortgages (I have 3 separate smaller ones as it worked out better interest wise). Admittedly it's over more years than is ideal but is fixed for 10 years - you need to speak to the bank. You may be able to get 5x your salary if your finances are in order and you can prove affordability.

Please don't use salary multiples to work out mortgages. Go on the various websites of the banks and all can give a rough indicator based on some simple figures like salary and benefits and maintenance. Some will take benefits and maintenance into account, some won't, all have different criterias