Mortgage fixed rate ending - advice for an absolute dummy please!

[LazyMareofEastown]

Situation is a bit complicated. Bought house 4 years ago with ExP (we were exes then, not together but were and still are good friends/co-parents) as it was the only way me (had been SAHM) and DC could get a not rented house (my deposit, his affordability). I pay mortgage, bills and all repairs. We have already figured out and agreed a figure that he would get in the event of the house being sold.

Fixed rate is ending. Ideally I would like to take mortgage over myself as I pay it anyway. I have been working for 4 years, the last year in a job with an ok-ish salary for me (£24k). There is about £90k left on mortgage.

Do I just ring current mortgage provider and ask if this is possible? If they say no do we just have to continue as we are until such a point that I am earning enough/have been earning enough for long enough to be able to take it over? I don't think it will be possible tbh.

Or do I ring London and Country (who we got our original mortgage through) and see if they can find anyone who will give me a mortgage? I would need a lender who takes into account benefits and/or maintenance as I get a UC top-up to my wage and maintenance from Ex. I'm aware these lenders are very few and far between but L&C did tell me there were a few who did this.

If I'm honest with them about Ex not being involved/contributing anymore even though mortgage was attained on his affordability, can I be penalised?

This might sound really stupid but I've never done this kind of thing before (Ex did all the admin for original mortgage).

Help!

It's not an either/or situation. Ask your current provider AND ask L&C, and you can also ask other brokers as well. They will be able to give you an idea of how likely it is you'll be accepted, to help you decide where to apply. You'll then have a good idea of where you can get the best deal.

There's no penalty for paying a mortgage successfully; you don't have to tell them anything, lots of couple split up with a mortgage so it's not really a different situation.

£90k on a £24k salary for a sole mortgage sounds do-able, if you've a decent credit history then you should be able to find a reasonable deal.

If £24k is your salary, with UC and maintenance on top, you should be fine as that's 3.75 income multiple without needing to consider the rest and most lenders allow up to 4-4.5 x.

Things that would work in your favour would be good affordability - so moderate your spending as much as you can in terms of avoidable extras, good credit history and low or no debt (although use of a credit card for some normal expenditure that is paid off in full every month is a plus). Also if you have good equity - you mention a deposit, and also have paid the mortgage down a bit.

Have a look on Moneysavingexpert for the remortgaging guide, so you know what to expect and how to position yourself as well as possible in your circumstances.

Thank you LordEmsworth. I'll make some time to make the calls this week.

I do have good credit so hopefully that would strengthen my chances.

Am just nervous as this is all new and I'm stressed as really want to sever financial ties as much as possible with Ex. We both have new partners now and want to move on.

Thanks again 💐

Do you need to factor in paying him some equity now? That would actually be the cleanest break - then you’d not need to still wait until you sell the house. If so, you’d be looking for a mortgage of £90K plus whatever that figure is.

But yes - common situation so just go for it. No need to explain he’s never been resident etc, just that you’re splitting up. Good luck!

NoSquirrels I didn't know you could do that 😳. That would be easier all round, certainly for me in terms of closure and for Ex in terms of giving him the money.

Am worried that to do that would mean me asking for the higher figure of mortgage balance + his equity thereby making it much less likely that I'd get approved?

Why do you need to pay your X off if you paid deposit, mortgage & repairs?

@LazyMareofEastown

NoSquirrels I didn't know you could do that 😳. That would be easier all round, certainly for me in terms of closure and for Ex in terms of giving him the money.

Am worried that to do that would mean me asking for the higher figure of mortgage balance + his equity thereby making it much less likely that I'd get approved?

Well, depends on how much you’ve agreed with ex? If it’s a relatively low amount then no issue. If it’s a high amount then see below because you may need to renegotiate...

I hadn’t really appreciated he’s paid nothing into the house at all. As Redthroated says, because you’ve paid all costs his share is just the technicality of him allowing you to use his name & salary for affordability. He’s lost ‘opportunity cost’ (being able to be on another mortgage) so I see you’d agree to pay something but he hasn’t earned any equity, as all the actual money paid into the house is yours. So hopefully you haven’t agreed to pay much... ?

The amount isn't huge. Ex paid half the mortgage for first few years before I took it over completely as I was working part-time and was on benefits. He also paid for the conveyancing.

It's a bone of contention because initially he tried to insist that he was entitled to a larger amount (as in a third of a deposit that came entirely from my parents) solely due to us getting the mortgage on his affordability. I think he should just get back what he paid in via the mortgage plus the conveyancing costs plus a bit more as a token of goodwill on my part. The mistake I've made is that we only have a verbal agreement and that he will try and shaft me when push comes to shove. We get on well but he's incredibly self-serving (hence him being an ex!).

If I can offer him money now I would hope that that would incentive him to stick to the lower figure. He wants to buy a house with his new partner eventually. Being off my mortgage and having a bit of money for a deposit would be good for this. The thing is, I am in no rush to move out/buy a house with my DP so if he tries to insist on more money I will just make him wait till I sell. I know he could try and force a sale but believe me, he is the laziest person ever and would never go to the effort of finding/instructing/paying for a solicitor to do this. I've known him for 20 years. There's no way he'd do it.

In that case, definitely try to get him off the mortgage and paid off properly ASAP. The longer he’s on it the more he’ll have a claim to the increase in value of the house so a good idea to sort this finally as quick as you’re able.

Start by calling a broker like London & County and explaining. They should be able to give a ‘soft’ answer on affordability for the remortgage (existing mortgage + payoff amount). Get an up to date figure from your mortgage account now too.

Talk to a broker OP, they will help you. I will bang my drum for very good local brokers that don't have the marketing budgets of L&C but still provide excellent whole of market advice without charging you a fee!

Seems a good idea to try and sever financial ties with ex too, and if you can't, maybe get an agreement in writing with him and a plan to do so at next remortgage time in 2/3 years