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Sole mortgage without husband (complicated!)

5 replies

Laura447 · 09/07/2020 08:35

Dear all,

I am currently on a mortgage with my mum on the house my husband and I live in.
My husband has bad credit and a load of credit card and loan debt totalling about 18k.
I want us on a clean slate money wise and we are expecting a baby in november. He has just got a really good payrise which will help.
Thing is I don't want to put him on the mortgage until he learns the value of money and improves his credit score. Its not that I don't trust him, he just hasn't grown up with the financial savvy I have and I think it's important he learns that before going on the mortgage, not to mention his bad credit would increase the interest we would be paying on a mortgage.
The plan is for me to remortgage and add on the 18k of debt ( no lectures here please, we are married and I know it will get paid off. He will also be putting the extra 500 quid a month from his payrise straight into my bank account until the debt is repaid! We are already living well within our means due to another recent payrise for both of us). I earn 37500 a year and have no credit card or loan debt (only thing close to that is my Mobile phone contract) there is 120000 left on the mortgage so I'm hoping to get Approx. 138000. Do we think this would be possible? It's about 3.7 times my annual salary and I'm pretty sure I read lenders could go up to 4.5 times your salary? I have good credit with no missed payments or outstanding debts.
I am getting mortgage broker to help anyway I'm just impatient and wanted to hear people's thoughts on if they think it's possible.

Now comes the tricky bit- my mums on a 5 year fixed mortgage with for 2 more years but I really want to get our finances straightened out before then (the early repayment charge is nothing). I don't want to tell my mum about his debts- with my financial upbringing she will be livid with him! I know it might sound a bit overbearing to some but my parents are just very loving, not to mention generous (for example my mum agreeing to go on the mortgage with me in the first place) . I hate to lie but it won't change the situation if I tell them the truth and it will just make them dislike my husband for putting me in this situation.
That's not the part I need advice about! I need to know what's a good reason to tell my mum why I'm remortgaging early.
I'm thinking of saying my husband and I are now in a position to go in on the fixed mortgage together, but can a fixed mortgage be transferred to another person? If that's the case I'll just tell her we are doing a straight swap.
I hate this and I don't make a habit of lying to my parents but I have to make my own decisions some time. I really feel this is a smart move as it will free my husband and I up about 400 pounds a month (because he won't be paying the minimum on these extortionate cards anymore) , which we will need with a baby on the way. Plus the 500 a month he will be givinge means that eventually I won't be out of pocket. He won't go on the mortgage until he repays me everything so if for any reason he doesn't repay me, I'm still safe with the house being only in my name (we have an agreement in place atm where the house is mine if we split but that changes if he goes on the mortgage), so I feel this is the right thing. I don't want my parents worrying or hating my husband.
Please no lectures, I married my husband for richer or poorer and I'm sticking with him. This will benefit us both. I just need advice on what to say to my mum and any insight on whether you think I am Likely to get that mortgage! SO sorry this is so long! Really appreciate any views! X

OP posts:
maxelly · 09/07/2020 12:26

Hi, yes it does sound complicated and I'm not sure I've fully understood all your questions, so I think you really need to discuss it with a mortgage broker/your bank/a solicitor to get it sorted!

That being said, you do realise that because you are married, your husband already effectively owns half of your assets including the house as a joint asset of the marriage, regardless of whether he's named on the mortgage or whether he's 'paid you back' or not? The mortgage is just a debt secured against the house, it doesn't determine what would happen in the event of you splitting. I'm not sure what the 'agreement' you have that you get the house if you split is but pre-nups even if properly drawn up and legally notarised are not legally binding in the UK, and if it's a verbal agreement it means diddly squat in the event of a contested/acrimonious divorce I'm afraid. So your plan to 'reward' your DH for sorting himself out financially by 'allowing' him to take on half the debt seems a bit wonky to me (no judgement here, obviously you chose to marry him so that's fair enough, but it's just how marriage works - for richer for poorer yes, but also 'with all my worldly goods I thee endow' - not 'with the part of my worldly good I trust you/you've 'earned' I thee endow'!).

I assume that because your Mum is liable for part of the mortgage, she also therefore is named as a joint tenant or tenant in common on the deeds, and therefore owns at least a part of the house? Did she contribute to the deposit/equity and is she expecting that to be paid back at any point? What was your plan to eventually buy her out or remove her from the mortgage at the end of the term - were you married when you took it out? If your main concern is to protect the house in the event of a split from your DH then by far the best thing would be to leave it in joint ownership between you and your Mum, because in theory then only the part of the house you own would be a marital asset and therefore he'd get much less (assuming the judge accepted that your mum genuinely does own part of the house, and also how assets are split in a divorce is based on need and not necessarily a straight forward 50:50, but obviously if there's less in the 'pot' to start with then he'll get less whatever the ratio of the split).

On your salary I would have thought borrowing £138,000 would be OK, although you don't mention how much the house is worth, the absolute maximum loan to value rate for most providers is 90%, although you'll get a better deal the lower the LTV. They will probably enquire about your marital status and your husband's debts (which, because you are married are to an extent joint debts) and for a lot of lenders it will simply be impossible for you to get a sole mortgage when you are married, particularly for a high LTV rate (because as above you can't be viewed as the sole owner) so this is something you need to discuss with your broker.

As to how to approach it with your Mum (and assuming you don't want to tell her about the debts), I'd simply say as you have said that now you are married and with a baby on the way it's time to regularise the financial situation. That wouldn't be a lie per se in my mind, just an omission...

maxelly · 09/07/2020 12:31

PS this is a good article about how you go about changing/removing people on and off mortgages and seems a reasonably good site in general for advice

www.onlinemortgageadvisor.co.uk/mortgage-application/transferring-adding-and-removing/

ChicCroissant · 09/07/2020 12:42

If you are on a fixed-term, what is the financial penalty for early redemption of the mortgage, around a month's interest? Because I doubt you can swap, you'll have to apply for a new mortgage.

You seem to be rushing this tbh, I would take a step back and have a rethink. While it might seem to be saving you money in the short-term, you're putting debts on to a much longer-term interest rate! I would calculate the difference between those 'extortionate' cards and the mortgage over presumably a 25 year term.

Your DH might not be on the mortgage, but will be considered a dependent on your salary, surely? And as the PP said, your mother must be on the deeds at the moment so she would need to come off them and that would also incur fees (and that your DH would already have a claim on the property).

I would slow down and talk to the broker. Maybe it's the nesting instinct kicking in but you sound a bit manic! Don't panic, there is time to sort things out properly, don't rush into something that is going to cause more issues further down the line.

Hope you hear back from the broker soon, OP.

tribpot · 09/07/2020 12:56

Would it not make more sense, if you insist on taking this debt on for him, for you to take out a loan to pay off the credit cards? On the understanding that he will be responsible for the loan repayments. This way you don't secure the debt against the property and end up paying much more in interest as @ChicCroissant says. You also don't need to involve your mum. The debt is also more 'visible', it hasn't just been absorbed into a mortgage.

That being said, I'm not sure why you think your DH will learn how to manage money properly if you simply make this problem go away for him. It would seem much more sensible for him to engage with a debt charity and come up with a repayment plan on his own.

karmasic · 02/08/2020 10:07

You will be able to get a mortgage on your own but as you are pregnant that might change things enormously, I would have thought?

Maternity leave is usually less that your full salary and a lot (if not most) women drop their hours/days after returning from ML.

The lender might be very wary of this?

Your husband will have the right to go for half the house if you divorce even if you don't put him on the deeds.

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