Borrowing equity from house but won’t take husband contribution as income

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I’ve owned my house for 15 years. Met husband 9 years ago and he moved in after 6 months of dating. He previously lived overseas before this for over 3 years. We’ve been married nearly 5 years.

Mortgage is interest only and my Dad is on there in name only. Never changed it as (now) husband moved in quickly after meeting and I just figured I’d put him on there when we bought a new place together.

I have £100-130k equity in the house.

I want to take out £20-30k for an extension. I’ve been told that even though my husband pays for half of all bills (cars, mortgage, childcare etc) the bank won’t take this income into account as he’s not on the mortgage? This is around £1300 a month.

All bills are in my name - two cars, mortgage, childcare, utilities etc - and I have my own business so only take out what I need (£719 in salary, some expenses and dividends based on what I need) and my husband gives me £1300 a month.

If the mortgage company doesn’t include my husbands contribution (which I can prove with bank statements) my ‘salary’ per month is really low, even though I could take more if I chose to, but I think they would decline giving me the equity on their affordability calculator.

Any advice?!

You need to take your dad off and put your DH on.

When you take out a mortgage you're entering into a financial contract, of course they wouldn't take your DHs income into account on your say so.

Is there money in your business that you could borrow? Self employed friend mentioned something about a 'directors loan' from his business when he bought his house, so is this an option?

Otherwise you either need to put your DH on the mortgage, with the necessary formal agreement to protect your equity, or you need to take a full salary from your business as you do need it to qualify for the remortgage on your own. Perhaps talk to your accountant about the best way forward regarding your business income.

I would have thought you should talk to mortgage company/ accountant first. Depends on their policy really

You may struggle with this- you don't have 'equity' so to speak with an interest only mortgage as you will need to pay off the amount at the end. Lenders also more rigid over interest only mortgages now.

You need to get proper advice. They won't take into account your H unless he's actually on the mortgage.

The OP says she has £100-130k in equity, ie the house is worth that much more than the mortgage. In some, but not all places, the value will have gone up substantially in that time.

But I do agree with you about banks being stricter about interest only mortgages these days, as if the OP bought this house 15 years ago, that pre-dates the 2007 crash when everything changed in this regard.

OP, if your mortgage is interest only, do you have savings/an investment product in place to pay them off? Is it possible to borrow from that the pay for the extension?

Totally makes sense they don't take his income into account, he is not on the mortgage. Would he be liable if you defaulted on payments, maybe not so they will not lend you money based on his income. If he is not on your mortgage he could take out another mortgage/loans etc elsewhere without them knowing and increasing their risk.

If you want to borrow against your dh's income he needs to be on the mortgage.

BarbaraofSeville - I could do this, although not for the full amount we'd need, but it is an option.

The house is worth £250-280k, which is why I thought if I have £100-130k in equity then they would let me release £20-30k of it.

My mortgage advisor said they could do this separately to the current interest only mortgage I have, and the additional borrowing would be repayment.

I know he's not on the mortgage but it is an 'income' I get monthly. I did hear once that if you get maintenance for a child this was included when applying for a mortgage (I might be wrong), so why not the money my husband gives me for half the bills?

I don't want to put husband on the mortgage as it would then have to be repayment, and for now staying on interest only suits us. He also changed jobs 6 months ago so this may not be seen favourably - he works 3 x part-time jobs in the healthcare sector, it pays well but on paper they're 'contract/zero hours roles', even though he's been in two for more than 7 years, and the new one is permanent.
This will change when we buy next time, which will be about 2-3 years, and he will go on the mortgage and it will be repayment.

Not all lenders will consider child maintenance as income.
The reason it is different, is that there is a legal basis for the recipient receiving CM. Yes, the payer might lose their job, but there is a legal obligation to pay maintenance. So it’s fairly secure an income source.
Your husband giving you money is not secure at all - he has no legal issues obligation. That is why lenders don’t look at it the same way.

If you a moving in 2

When I remortgaged the advisor said to be considered child maintenance needed to be court ordered.

Thanks for all the comments.
I asked my Dad to lend me most of it, and he said yes, and the rest I’ll take as dividends from the business.

If you’re moving in 2-3 years is it even worth doing an extension? Surely it’s better to save the money you would have spent and put it towards the new house.

It all sounds very messy.