Banks attitude to separated couples

D

danash

Registered User
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Was wondering if anyone could share their experiences with banks follwoing a marriage breakdown. We are currently living in separate houses - both in our joint names with equal mortgages on each. My wife wants to take a mortgage in her own right ( earning 36K - mortgage 300K ) and take my name off the original house - and vice versa for me. I am happy to do this but wonder if the banks will agree. I pay maintenance and have a reasonable salary to cover my own mortgage.

Do they take account of the maintenance in contributing to my wifes income - and ability to service a 300K mortgage ?

Or do they run a mile from separated couples....?
 
Don't think the banks give a fiddlers if you're married, seperated or painted green so long as they can make a profit on the money they lend you. If they think you can repay it, they'll lend it.
 
Firstly there would need to be a legal separation in place to confirm the financial details of the separation and also to confirm that neither of you will have an interest in the other's home. However unless you are paying substantial maintenance there is no way your wife wil be able to borrow €300,000 on an income of €36,000. With no maintenance, no loans and room rental her max is going to be circa €190,000.

Sarah

www.rea.ie
 
Thanks Sarah - I note you work for a broker - the mortgages exist currently with the same institution - with maintenance her total aftertax income is c 4000 - would that fund a 300K mortgage ?

The bank already is exposed to our circumstances with the 2 mortgages - would they force us to maintain the dual names situation until she can satisfy the multipliers ?
 
Yes, with no loans €4000 net per month would fund a mortgage of €300,000 over 35 years. The maintenance you're paying might negate you from qualifying though - depending of course on how much you need to take over the mortgage on your home. The bank, AFAIK, can't force you to maintain the dual ownership, especially as this could lead to CGT liabilties in the future.

Sarah

www.rea.ie
 
I would have around 4000 myself after the maintenance so logically I should be able to fund the same 300K. Mind you the 35 year scenario would be a problem as we are both in our forties.

Are you saying that the banks could not block us from changing the properties into single names - surely that would be an issue as the mortgages are in joint names - where is the separation between the asset and the mortgage ?
 
"Are you saying that the banks could not block us from changing the properties into single names - surely that would be an issue as the mortgages are in joint names - where is the separation between the asset and the mortgage ?"

Really you can do anything you like once you pay off the mortgages. But isn't that the issue : whether what you would both like to do is practical and realistic?

It may be that when you rattle down all the figures that one house may need to be sold to pay off mortgage(s). You probably both need legal/accountancy advice to see if the figures stack up.

mf
 
We dont want to pay off the mortgages as we both need somewhere to live - as it stands we (luckily) have a house each - of equal value with an equal outstanding mortgage. My wife is anxious to remove my name form the deeds/mortgae of the house she lives in as she wants to be free from me financially ( but not from my maintenance). If we were to sell the second house to pay off the mortgage on the first one that would allow my wife to live in a mortgage free house - we would have a 60K CGT liability on the second house and I would have to pay c 50K in stamp duty to buy myself somewhere to live - with a relevant mortgage.

So the issue really is can the banks stop us from signing over the houses to each other when a significant mortgae exists onmy wife's house. Her ability to repay that mortgaGE
 
We dont want to pay off the mortgages as we both need somewhere to live - as it stands we (luckily) have a house each - of equal value with an equal outstanding mortgage. My wife is anxious to remove my name from the deeds/mortgage of the house she lives in as she wants to be free from me financially ( but not from my maintenance). If we were to sell the second house to pay off the mortgage on the first one that would allow my wife to live in a mortgage free house - we would have a 60K CGT liability on the second house and I would have to pay c 50K in stamp duty to buy myself somewhere to live - with a relevant mortgage.

So the issue really is can the banks stop us from signing over the houses to each other when a significant mortgaGe exists on my wife's house.
 
"So the issue really is can the banks stop us from signing over the houses to each other when a significant mortgaGe exists on my wife's house."

Yes.

It may be that the best thing is to leave the situation as is. It may not suit your wife but perhaps it is the sensible thing to do.

mf
 
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