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.

@Mrsttcno1

But if I went through all the checks and then they said no...I don't actually have to press the button? I can just do it speculatively? So if they say no then I can just say thanks but no thanks

Just because you’re allowed a second charge doesn’t mean you would be able to get one though. Same as borrowing extra on your mortgage it’s a case of affordability checks and so being allowed one is no use if you can’t be approves for one.

Remember if you have to do an early redemption fee then half of that charge is his to pay. It comes from the equity before you split it.

Do you still have any credit cards or loans with outstanding balances? If so it may have been declined due to affordability. Even in these circumstances we advise customers to refer to their credit profile, which probably isn't really helpful when most people will be checking for low credit score or any adverse credit history.

What was the agreement regarding the mortgage in your divorce? Does his name need to be removed? Was the agreement that you’d essentially buy him out?

I honestly think you need a meeting with an independent mortgage adviser and potentially a solicitor depending on what has already been agreed to work out how to put your best foot forward here.

It’s a minefield and even with the best of intentions I can’t guarantee my advice is accurate based on the info given so I’d really suggest speaking to someone properly with all the relevant details and see what your options are.

@UncharteredWaters

If the financial settlement states he's due x though I don't think it states the "cost" of selling the house/remortgage is splittable? I'd have to get him to agree?

I was in exactly the same situation as you a few years ago. My ex husband and I only had the mortgage as a shared financial commitment but he had run up massive gambling debts (thankfully in his name only) and when I tried to remortgage to buy him out of the property, my existing lender (also NatWest) said no. Although they didn’t ever say why, the only thing that could have been the reason was my EXH’s debt being linked to the house and we were financially associated.

Anyway - there is hope, you just need to find a lender who is understanding of the circumstances. I went to a broker and they had no problem finding me a lender - I went with Barclays - but had lots of options.
I found NatWest to be useless TBH. I had banked with them since I was 18, they knew my finances inside out but would not budge, even when I complained.

It was very frustrating and stressful but there is hope. A good mortgage broker will be able to give you some options. Hope get things sorted.

It’ll be the dependants. I was in your position about 10 years ago. Earned more than enough to pay the mortgage, but because I was a single parent, DD was still in school, they would only give me 2/3 of what I needed. I ended up getting shared ownership, the rent element being twice what I paid in mortgage.

If he doesn’t agree to get his £60,000 in instalments, can your parents help?

@Timeformetofly

Sounds very similar to my current problem - although I don't think ex gambles - but he is useless with money and living within his means

@BuddhaAtSea

They would and they wouldn't.

I think they would see it as them giving him money they have earnt and worked hard for and no way would they do that

They wouldn't bat an eye at lending me the money personally if it was say for an extension

I could probably get him to agree instalments - would I have to get a solicitor to vary the financial consent order?

Can you phrase it as buying him out of the property so that you are no longer associated with him? The price it costs to take him off the mortgage, increase your share in the house and disassociate yourself from him. You could offer to pay them back.

@Unexpecteddrivinginstructor

Yes I could maybe

They hate him. The reasons for our divorce - I'd personally rather he'd had an affair (sorry to those that have been cheated on before - I know what that feels like from a previous partner) but the reason for ending of nearly 2 decades completely decimated my little family

I've had a look at London and Country Brokers - thanks to the poster which recommended - and I feel a bit less stressed - at some of the rates they are showing me I could afford to take the hit on the ERC charge (£7k ish)

The only person who can answer for certain is a broker, they'll have access to deals you won't get on the high street. If there's an issue with credit report it might not just be Equifax but the broker might be able to get round it. If you meet affordability for extra borrowing to pay him off you maybe able to borrow more to fund the early repayment charge. I used to work for a broker and people could borrow between 4.5 and 5.5 times their income but I dunno if it's changed since the rates went crazy in 2022

Except he’s getting X amount of money it’s a % of the equity. The equity is what’s left after the mortgage is paid off, an early redemption fee is part of the cost of the mortgage.
Id give it a good try!!

@UncharteredWaters

No my financial consent order is based on a fixed lump sum not a % - this was so that ex couldn't benefit from any uplift in house prices (confidant my area wouldn't see any decrease - house prices in my post code alone increase well above national year on year average) and also so that he wouldn't benefit from me paying the mortgage alone and for what will be the best part of 3 years

First question - How much do you have left at the end of the month after mortgage/bills/food/clothes/travel - absolutely everything?

Second question - do you have any savings and save regularly? If so how much?

Ah rubbish, I see what you mean that way.
Hopefully you can find a way to get the mortgage/money

Check your nation hunter report. We had a similar issue a few years a go, bank refused to approve mortgage with no explanation. Our broker was bemused, perfect credit ratings, mortgage was very much affordable. Eventually discovered that my husband had a marker on his nation hunters report, didn't appear anywhere else, completely false - we had to contact TSB who had mistakenly reported fraud, prove it was absolutely incorrect and they then had the marker removed.

As of January (getting Xmas out of the way, car service and MOT is this month and I'm expecting repairs of £700) circa £500 a month I have surplus/able to go Into savings. Some months it a lot more - I've done a spreadsheet budgeting all expenditure for next 6 months - some months will be £600 plus. Some months less depending on birthdays etc

@MotherOfLunatics

Thanks I'll try that one as well tomorrow

Nothing really to add, except I'm confident you'll be able to do it, one way or another.

im really sorry for whatever it was that blew your world to pieces. I hope you & the kids can recover from it.

best of luck with everything 🤗

Fab. So I do wonder if a smaller personal loan and then a smaller amount on the mortgage? Then extend the mortgage term again if you can and do your best to overpay the personal loan as quickly as you possibly can - not good to have personal loans due to the interest but could be a way out.

I would however agree to see a couple of good Independent mortgage advisers asap - they have other tricks up their sleeves that could be much better.

he’s still on the mortgage? Have I read that right?

if so that’s the reason you can’t take additional borrowing. You need a transfer of equity. And fyi you’ll need that for anything including a product transfer when your fix is coming to an end or you’ll be stuck on the variable rate.

you’re getting in a bit of a muddle too, I think people on MN mean well but don’t understand mortgages.

if you Remo away you’ll have ercs, likely high ones as you’re early into your fix.

your options are further advance (additional borrowing) or a second charge. A second charge will be at a higher rate of interest but first port of call, primary lender and transfer of equity to get him off the mortgage. That is your core problem.

porting is normally when you move

youve mentioned equity release, you don’t need that.

Re mortgage advisors, tbh they all have access to the same sourcing systems so the results won’t vary hugely from one to another, and when it does, it’s likely because that specific broker is getting a higher commission from that one specific lender so they’ll guide more business there.

so may as well see one that doesn’t charge an upfront fee

@Ohforgodssake123

Thankyou! Yes it's still a joint mortgage. He agreed to refix the mortgage when the last fixed term ended - early on in the divorce process - as I don't have to pay him the divorce settlement until the end of next year when my finances will be in an even better position with all children at school and it meant getting a good fixed rate when there was uncertainty (panic) about high interest rates could have gone

So Crux of it is - we have a joint fixed mortgage together which expires early 2029

I need to pay him £x by January 2026

I thought - perhaps naively - that even if I didn't want to sell the house - I would just remove him from the current mortgage taking it over in sole name and do additional borrowing and the transfer of equity would be completed fulfilling the terms of the financial consent order

I think I have perhaps over complicated things by

a) it should have been a fix for 2 years not 5

And b) tried to look at moving house, removing him from mortgage, porting it and borrowing more money to pay him off.
Even writing it that down sounds like I've tried to do too much