Refused remortgage - what to do

[notbeenagreatday]

I've posted in legal too but thought might be some more advice over here

So under the terms of my divorce I'm due to pay ex husband a sum of money next year. I am in the family home as have young children and always earnt 3x ex so can cover the mortgage easily.

Was mulling over moving house so rang to discuss with my current mortgage provider today - who after doing a soft check flat out refused to offer additional borrowing on my current mortgage to pay him so I can't move and I can't do additional borrowing!

I'm shocked. They said they based it on my Experian Report - but I've duly registered and my credit score is 1000/1000 - literally cannot improve on it.

What am I supposed to do? They said it could be due to ex husbands credit rating (they are so wishy washy with what they are allowed to say) but I have no control over whatever debt he might have had if he used this house before he moved out as the registered address other than asking him to change the address details? I can't ask him to run his own credit report - we don't have that kind of relationship?

My salary is circa £85k per year and my current mortgage is £170k and I need £60k so well under borrowing multipliers

I re fixed at the end of the last fixed deal so that has 4 years to run without incurring early redemption so can't change lenders.

Won't you have an early repayment fee anyway?

It wouldn’t necessarily be in your name, it would be in his name but secured against your jointly owned property. It’s unlikely as you would need to have consented but as I say with digital signatures etc not impossible.

If you currently have childcare costs then that will almost certainly be why or a huge contributing factor to your limited borrowing capacity. Multiple kids + 1 income + childcare costs = risky.

Try again when you no longer have childcare costs and it may be different. Although when you say no childcare costs visible on statements, do you actually mean no childcare or just that it won’t explicitly say that on statements? Because if the latter and say for example you’ll just be sending a parent £c a month for doing drop offs for example, you’ll still have to explain that, any monthly transactions will be looked into especially when a risky case. Good luck x

@TidalShore

No I didn't think so because I was looking at

Option a) removing his name from the mortgage and taking out additional borrowing in my name

Option b) removing his name from the mortgage; porting it to new property and taking out additional borrowing in my name

If you’re aiming to take on the mortgage (and extend it) by yourself I’m confused as to why your ex’s credit rating would be a factor?

@notbeenagreatday there’s a site which reviews your credit against three major credit agencies; Equifax, Transunion and Experian. I joined for the month free trial and saw that my rating varied between the three and two had me financially associated with two exes! They do the disassociation requests and let you know when done. You can do it yourself but was easier for me. After the free trial I paid £15 a month until I have been financially disassociated with them.

@Mrsttcno1

from my statements at the moment they would see regular payments to the Taxfree Childcare Account but after June that bills drops significantly - I could even pump all spare cash/savings in there and put aside 12 months of holiday club/possible childminder fees in advance of then applying for additional borrowing so that if they looked at 3 months statements they wouldn't see anything on there at all childcare related?

@notbeenagreatday checkmyfile is the name. Money saving expert recommended it.

@LittleFloatingGhost

I'll have a look at the disassociation requests - on Equifax it seemed like all I could do was put a note on the file (which I've now done) but I'll have another look

All 3 of the ones you mentioned I've checked today and all gave me a 100% rating

I'm recently divorced too and need to sell the house. In my case the ERP would still be payable even if I got a new mortgage with the same provider.

As a PP said, London & Country are good brokers (and free - they get paid by commission from the lenders). Definitely speak to a broker about your options.

If you are in contract and making any changes (which additional borrowing is) then yes you would have to be ERC if one is applicable to your deal.

I wouldn’t advise doing this honestly, there’s a reason they ask these questions to determine affordability. But as an aside, 3 months is a starting point, they can request more than that.

What about applying to remove ex husband name from the mortgage?

Then doing additional borrowing in 12 months time?

Is it because I'm looking to do additional borrowing to pay divorce and they won't do additional borrowing for debt consolidation?

Some lenders can refuse additional borrowing depending on the "reason" you give for the borrowing. Say it's home improvements, get a quote for some work which equates to the amount you need to pay him off.. nobody from the mortgage lender will come to your house to see if you've done the works.

You have said they have said no to additional borrowing due to your credit report but you say that is absolutely fine, no adverse ? This does not sound right? Maybe ask them what it is about your credit file ? Adverse linked to other people linked to your address will not affect your personal rating. That would be madness. I recommend speaking to a mortgage broker. Every lender is different and have different policies. X

It's usually against the terms of personal loans to use them for houses/mortgages. Would probably be better to ask a mortgage broker what the penalty cost would look like for switching to another lender, it might not actually be very much.

@Stef92

Yes I think I might do this

Do you think it's better to apply to have him removed from the mortgage first since it's only £185?

@Newmumburnout

I know! All they would say is look at who you are associated with - but felt like I was talking to a brick wall with both Equifax and NatWest as I WANT to completely cut financial ties but I need the additional borrowing to do this!

Before you do this have you made absolutely sure that you meet the providers affordability to take the mortgage on solo?

Seconded, my mortgage company let me go through the checks without actually going forward and taking my exes name off, you might wanna do that ASAP as they completely redo your affordability checks! (Or they did for me)

@Mrsttcno1

Ah ok. Well maybe that's a call for me to do next week or two?

I am pretty sure you can only apply for a dissociation if you do not have any joint credit and as your mortgage is joint this would not apply to you.

You can pop a note on your credit profile which companies legally have to read but to be honest anyone can put a note on their credit profile but it doesn't change your current financial circumstances.

Your credit report maybe fine, you may have no defaults, no missed payments or CCJS but what about affordability. As an underwriter, we check affordability based on a person's credit report. We check the person as an individual, regardless of who is linked to them, regardless what has gone on at the address. We only check reports for finances that you are responsible for.

So if you are jointly responsible for a mortgage that you believed your partner to be paying and they actually missed payments, this would affect you. If your partner had a credit card solely in their name and missed payments on it, this would not affect you. Certainly not in the world of credit that I work in.

Such a bloody minefield. Maybe I do wait until June and no childcare costs - I've still then still got 6 months to pay him

Reading the mortgage paperwork it does say I can do a Second Charge against the property so maybe that's also something to consider

@Wheelz46

Thanks. I know the mortgage has definitely always been paid - it's been the only joint debt we had - and it's always come out of an account I manage day to day

Any other loans like car loans in the past etc I always took out in my name as I was the main earner by a long a way

I would. They completely re-do all of the affordability checks from scratch for you as the sole applicant so it’s not a guarantee that you’ll even be approved to keep the mortgage in your sole name until you’ve been through that.

2nd Mortgage or bridging loan, a bridge would probably only be a year or two maximum and if you couldn't pay it back you might have to sell the house to pay it. Revisit closer to the date. One company I know that might do it, not a recommendation:

www.somo.co.uk/products#loan-purposes