Taking on the mortgage plus personal debt

[RockingRocket]

STBXH left several months ago. All rather unexpected and hideous. Not sending much by way of a financial contribution to the children.

I would like to stay in our house. The house is worth about £500k. Mortgage of £230k left.

My take home pay is about £4K a month. I pay £1,300 a month for childcare, £1,800 for mortgage, council tax and all bills plus a whopping £1000 a month servicing personal debt which stems from a business which STBXH set up ages ago (I know - I was stupid - no lecture needed).

I'm using savings every month to cover food etc. So really need to reduce outgoings. Houses are not selling well around here - most taking at least a year to sell (and ours isn't in great shape so unlikely to sell quickly). Plus we'd only just taken out a 5 year fix when he buggered off.

So I am wondering if I could take on the mortgage myself. And borrow an additional £45k to pay off the debt and just have the (slightly increased) mortgage?!

Mortgage is with First Direct. I daren't just ring them and ask. What if they say "no, and we'll no longer mortgage you as STBXH has buggered off...."?!?

Do you think they would do this?

You won't know until you ring. Even if they do say no, you could speak to a mortgage adviser to find another lender. The only bummer is the early repayment charges in case of changing lenders.

Also, what's the legal situation with ex and the house? Won't he be entitled to any money?

Yes, early repayment charge this early is MASSIVE so I couldn't risk having to go to another provider. That's why I don't want to phone if it's a total no go.

He would be content enough to put the house in my name) probably on a "you get the house, I pay no ongoing maintenance" deal)

Well, it sounds like with the current situation, you can't keep on going for much longer so no point burying your head in the sand. It's better to ring now rather than when you've run out of savings.

How much does your ex earn and how old are the children? Is he paying at least CMS minimum?

What term is your mortgage over? The payments seem high for a mortgage of £230k.

Sorry, just saw that the £1800 was for all bills.

How much personal debt do you have and what type - loan, credit card etc? How long left to pay?

With a £235k mortgage on a £500k house, with £45k debt, you are looking at over £200k equity. Is it a fair split if you keep all of that.

I did exactly the same - paid the debt in return for the house, but we bought in 2008 and the debt = equity in house so he walked away with a clean slate.

Have you called a debt charity like Christians Against Poverty? Could you take in a lodger? Have you chased STBX for money via the relevant organisation (CMS?)?

Sorry I’m not sure about the answer to your original question but just wanted to check you’re exploring other avenues. Debt charities may be able to negotiate with your debtors to reduce the payments.

Sorry you're in such a shit situation.

Have you got a lot of savings left? The mortgage company look at outgoings and income. At the moment you wouldn't be very favourable because you can't actually cover all your outgoings with your income.

Will childcare amount change any time soon?

You need to get ex to be making child maintenance payments so a mortgage company can see that coming in also.

Thanks all. STBXH pays a little bit occasionally but is self-employed so difficult to chase - he takes nearly all his money as dividends and could happily not take some for a couple of years if necessary. I think he just wants to be off so would be ok with me having the house and not going for his investments and business...

Debt is about £25k in two credit cards, £23k on two loans.

The childcare costs will reduce by about £250 a month next September (2020) and by 2022, they will reduce to about £300 a month total.

Savings aren't enough to keep me going for the two years I suspect it could take to sell the house and get somewhere cheaper.

See a solicitor and get a written agreement to keep the house. Do this if your husband agrees ASAP before he changes his mind. Then get him to remove his name from the mortgage, maybe it can't be done before 2020 when your childcare reduces due to affordability but at least you have it in agreement. Also see if he will repay any of the debt.

Never rely on maintenance or even the cms as they are legally allowed to be crap( or so it seems), especially as he's self employed. You may never see a penny in maintenance as there are well publicised ways to never pay any and it's easier for the self employed to dodge it.

Also look into Downsizing, make the house as presentable as possible nd put it on the market. Even if it took a year, being proactive and downsizing now whilst you still have savings is better than 2 years from now with savings all gone and not being able to afford to pay the mortgage.

Is keeping the house, given you can't currently afford it, and not going after anything else really in your best interest? Can you have a chat with a solicitor to get a sense of what you are actually entitled to?
It sounds very stressful!!!

I think you will need to formalise it with a consent order. If not he could make a claim against house in 2 years and you will be stuffed as could not borrow again. The debt is technically shared if you are still married ex
even if it is in your name. So I don't think you should be rushing to take all of it in your name.

The debt is huge and will affect a remortgage. I'd be very careful not to take on more than you can afford.

Thanks again all.

The thing is that I think I can afford the house well enough - if I get rid of the debt. If my mortgage increases even by £300 a month, I get rid of the £1000 a month I pay on the debt. This would make everything much more comfortable. And I'm a saver - I wouldn't build the debt up again - it all relates to STBXH starting the business.

And then when the childcare costs go down I really will notice it.

I wouldn't sell the house unless it is obvious you can't pay the mortgage long term. It is stressful moving especially on your own and costs a lot. I think you need advice from CAB or a similar organisation who has seen lots of cases like yours and knows what banks do. You need to be sure about your long term costs, your childcare costs look low from 2022 but I don't know your circs.

I thought nowadays banks don't want to repossess so if they can do something (lend more so that high loan payments are not needed or increase the mortagage term) then they will.

I suggest you find out what can be done well before your savings run out.

Good luck and keep strong.

Both you & STBEXH need legal advice.

If he signs the house over to you, yes he can do this - but from the bank's point of view, he's still jointly liable (with you) for payment in the case of any default (by you).

Therefore he won't be able to take out a mortgage in his own name, should he wish to.

So it's really quite complicated.

The other issue re early release shouldn't apply however - if you were getting another mortgage, that would be like you purchasing a property (albeit one that you were in joint ownership of before). You're effectively purchasing the house from ex. (At least this was advice given to me, can't say it's exactly the same for you)

Also - maintenance needs to be sorted out. He can't just not contribute due to being self-employed.

I am not sure of the ages of your children but I notice you mention childcare costs dropping significantly. Just to say, and this is only my experience, as my childcare costs dropped, and my children got older, the other costs eg activities, shoes, clothes and so on, really increased and I've found it hard. Hence why maintenance is important.

(In case not obvious, I'm a single parent too!)

Thanks @Ternary @EarringsandLipstick

By 2022, I'll just need breakfast and after school clubs 3 days a week (compared to private nursery for one now. It's £115 per child a month approx per child.

Really useful info. There's not much by way of assistance where I live (no local CAB, only a financial inclusion unit run by the council but limited access and I don't qualify). I think I'll try and find a financial adviser locally. I have a solicitor for the divorce (and he is so-so - not terribly proactive or helpful but again options here are limited and conflicted out of using lots due to STBXH's interests 🙄)