Switching to Interest only mortgage - Home rights notice

[Oneofmany]

Hi all, currently going through financial settlement process. The ex has put a home rights notice on the FMH that is my name only. Can anyone advise if my mortgage lender is likly to allow me to switch to an Interest only mortgage? With my particular situation there may come a point (prior to an agreed settlement and being able to sell the house) that I simply cant afford it and run the risk of not being able to pay.

Another complication is that since the split I have had to become self employed and have only been doing it since Oct so no annual account etc

Any advice or experiences welcome

tia

 

[Unknown01]

The home rights notice is only to prevent you selling. It does not impact what kind of mortgage you have on the property. It makes complete sense to move to interest only during a divorce if the other party is going to get the lion's share of the equity anyway.

 

[Oneofmany]

thanks @Unknown01 are banks pretty open to this???? Another issue I have is that I had to go self employed back in October so pretty sure that will screw me up with getting a new product???

Any advice welcome

Tia

 

[Oneofmany]

Just done a bit of googling and have answered my own question.... not going to be able to do it as not been operating the business for long enough. Every which way I turn its another ****** problem. Had enough of all this ****

Feel like just walking away from the house right now. She's gunna get nearly everything I worked for over 17 years and I'm going to be left with **** all, my modest pension pot halved. The bank can have it back........

 

[Unknown01]

thanks @Unknown01 are banks pretty open to this???? Another issue I have is that I had to go self employed back in October so pretty sure that will screw me up with getting a new product???

Any advice welcome

Tia

Well, with interest only its going to depend on your LTV, the same as anyone else who wants interest only. Home rights notices won't be relevant.

 

[Oneofmany]

cheers @Unknown01 as above I wont be able to get a new product based on me only recently going self employed (it wasnt by choice either)

 

[Unknown01]

Just done a bit of googling and have answered my own question.... not going to be able to do it as not been operating the business for long enough. Every which way I turn its another ****** problem. Had enough of all this ****

Feel like just walking away from the house right now. She's gunna get nearly everything I worked for over 17 years and I'm going to be left with **** all, my modest pension pot halved. The bank can have it back........

The only downside of this is that it would trash your credit rating for 6 years and might impact your ability to loan money for your business. If this is not an issue for you then repossession can sometimes be a quicker option than waiting for a Mesher Order to end.

One thing you can do at the moment is call the bank and ask for 6 months of interest only payments without affecting your credit rating.

 

[Oneofmany]

Thanks @Unknown01 are they likely to go for it given the age of the business??? I cant see it myself but hope I'm wrong. How would a mesher order work? I've seem some threads but not sure I understand it. I'm still in the house. About £150K of equity (which it looks like she'll get most of) and she's only earning about £30K ish...... I may be able to earn enough to stay in the house and pay the mortgage for a few years but really dont want to be tied to her. How does it work??

 

[Unknown01]

Mesher Orders work in all kinds of ways but trust me, you don't want one. Even if you have to give her the lot, don't stay financially tied to her.

 

[CalmAndMeasured]

cheers @Unknown01 as above I wont be able to get a new product based on me only recently going self employed (it wasnt by choice either)

Not sure what type of self-employment you're in, but sometimes specialist brokers can help with this. They have relationships with the lenders, and know how to circumvent their usual earnings checks.

PM me if you would like a referral to someone I've been using for years.