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This is the situation:
Partner is divorced and finalising financial issues after splitting up with ex wife 4 years ago. It looks likely that he is going to have to stay on mortgage with ex wife until youngest son is 18 in 5 years time. Mortgage on the house is £150,000, house is worth approximately £220,000. They have a joint debt of £13,000 which he would like to add into the mortgage when it is renewed. Currently paying £800 interest only per month on current mortgage (ex wife signed into in without partners consent). The mortgage is up for renewal in March so he can’t do anything until then, but he is interested to know what offer he could potentially get, assuming the rates won’t go up too much by then. If he could get the payments down to £400-£500 a month interest only, including the loan consolidation that would mean the ex wife can afford the payments on her own and he would just need to pay child maintenance until the house is sold.
In the meantime, we would like to purchase a house together next year. We hope to have a deposit of £25,000 and purchase a house approx £165,000-£180,000 (_base_d on current local prices, obviously the higher the better). I earn £26k per annum, he is self-employed and his gross profit last year was only £15,000 due to the recession but the previous two years were £23,000 and we are hopeful that next years will be back up to that figure. What are the chances of us being able to get a mortgage on those figures, bearing in mind that he will still be named on the ex wife’s mortgage, although not paying it. We have no other debts/monthly payments between us other than his child maintenance which we envisage to be approx £300 max which will drop to £200 in a year’s time when oldest son reaches 19.
Other options available would be to borrow another £10,000 off my parents, giving us a £35,000 deposit. Or my father being a guarantor, however he is due to retire in April so will this be a problem (he has no mortgage, earns approximately £60,000 a year and has a final salary pension from a company he has worked for 35 years). If he could be a guarantor would we be better just buying the house in my name only and my other half “rent” off me until his house is sold. That way our house wouldn’t be at risk if his ex loses her house for any reason.
Sorry for the ramble but wanted to get as much information in as possible. Any advice/ideas would be gratefully received!
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