Mortgage stress please advise

[Newyearbee]

Please help with mortgage advice! I have recently told my husband I’d like to divorce after many unhappy years. He’s blindsided by this. We have 2 children of school age. We are in the process of securing a 2 year fixed rate mortgage which he wants to proceed with as we couldn’t afford the house right now alone (either of us) and we want to keep the kids in the family home. I am keen to move out within a year. He would buy me out eventually. The logical advice is to not proceed with imminent new 2 year fixed rate but not doing this would mean all sorts of immediate added stress (to him) and he’s already in a bad way. It would also be very unsettling for the children. Are my options for getting out half way through a 2 year fixed rate mortgage doable?

I was at a similar point and the fix was a big saving, so we took it and then it ended up taking 2 years to divorce and sell anyway. Have I misunderstood or if he's buying you out he'd just need to transfer into his sole name - which might b doable?

There'll be an early redemption fee, this could be tiny or huge, depends on the mortgage.
On the assumption its 1% of the balance after one year, its probably worth doing the 2yr as theres still a lot to sort out and the fee will probably be less than a few months of higher interest

It’s 2,5% first year Early redemption fee and 1.5% second year. His folks can help ‘buy me out’ to some extent but we are worried that he will need as long as possible with my name on mortgage to manage the repayments. Just means longer I have to wait to buy a place and a feeling of being trapped. He’s not being overly amicable eight now as he’s heartbroken and angry with my decision but I’m trying to do the right thing by kids too by keeping the family home going. Maybe transfer to his sole name after a year would be a compromise I’d say his parents could act as guarantors? Not sure what makes most sense

Hi , broker here . I would say fix for 2 years or go onto a tracker product with no ERC’s. Go and see a broker they can help look at your long term plan, look at your current situation and give you qualified advice . X

Most likely it is better to fix for 2 years and if you can be in a position to sell earlier than that take the redemption vs cost of std variable rate, do the maths on it.

if he’s blindsided and you don’t want to disrupt children your divorce and settlement is likely to take 2 years……

I know you’ve emotionally made your decision but it’s taken you years to get there .,,, your husband and children haven’t had that luxury so you need to slow down and cut them some slack a bit

If he is buying it eventually, check to see if the lender would port the mortgage in the event of a transfer or equity.

If so then I see no reason why taking the 2 year fixed rate should delay things.

I am in the middle of a 5 year fixed rate and porting current mortgage and adding a new one in similar circumstances.

Thank you for these replies, it is very helpful. I guess we need to proceed with the new 2 year fixed rate mortgage I am just anticipating wanting out before the 2 years is up. Assuming he wants to keep house in does it make more sense to swap name from me to say, his parents, or pay the 1.5% ERC? Would either of us get poor credit rating for doing this? Just feels silly when we have decided to separate to be committing to another contract together but the timings mean something needs done and it’s a rubbish time to sell - even if he did agree to it.

Of course you shouldn’t sign up to a fixed rate. Change it to a variable tracker then sort your finances out, see if he can actually buy you out and if he can’t then you’ll need to sell

work on 2 years to divorce - far cheaper to amicably sort the finances, file yourselves jointly for what you can etc. then you will have more money for your own place too. There’s no obligation to sell/split assets on the legal divorce immediately, we sorted the financial order later once dc were older

@Unexpectedlysinglemum thats not necessarily good advice at all !

even if the swapped to a variable tracker there will most likely ge early repayment, unless the variable rate is high and not particularly discounted.

you dont get credit impact for redemption fees.

also think about mortgage affordability - can he afford to buy out your share of equity AND this mortgage …. The mortgage lender may not also permit him to take it in sole name ie add his parents.

financially it probably does make sense to take out the fixed rate - erc is how much vs reduction in monthly fees in first 12 months /second 12 months…. But I think you need to think about overall assets and likely divorce settlement outcomes too. You seem to want to rush

i get it seems counter intuitive to commit to new deal - but me and my now ex did exactly this - which allowed time to talk, think through finances, think through timings, think through multiple options and then ultimately sell

Thank you, yes I guess I’m feeling hesitant to commit further cos he is taking the news badly and so it might draw out a toxic situation. However, rushing things definitely would also get nasty. Sigh!

I don’t it draws anything out

I have a friend who is in the process of divorcing she is six months in and now waiting for the financial settlement to be finalised.

She discussed with the bank how to deal with the mortgage as they are on a five year fixed rate, they were really helpful and she can retain the same mortgage on the fixed rate and it will be changed to her name.

This was a big relief to her once they checked she could support the mortgage on one salary.

Good to know there are options halfway through a contract