Buying out Spouse

[Ravima]

Colleague of mine has sadly separated after a shortish marriage. As part of the deal agreed, he needs to pay ex wife €200K.

He does not have this cash.

Hehas house worth €700K, recently valued by one of the sub prime gang with mortgage of €200K. His current bankers will NOT grant funds at home loan rate to 'buy off spouse'. In fact they told him, that they do not loan for this purpose at all (AIB). He has been put in touch with one of the sub prime lot, who will give him interest only at 7.5%, secured on the house, (aren't they the kindly souls!).

Does any one know of any of the main banks who would consider his position. He can easily afford the repayments on loan at 7.5, so there would be no problem at around 5% with the main banks.

I think that his problem may have been that he was too honest in telling holding bank the full story, but then again, I would always reccoment that course of action, lest there be problems in the future.

Is there any poster who has been in this unfortunate position who could point me in the right direction. PM's also accepted.

 

[mercman]

Re: Buying off Spouse

Thankfully have not been in those circumstances. However, I am surprised that his bank have basically said NO. Without all the details, but you have mentioned, that he could easily pay the existing mortgage and the new amount, I would say he should go shopping to another Bank on Tuesday morning. Try IIB. Failing that Ulster Bank, Bank of Ireland etc etc. As long as he is holding a secure job, with a steady wage to service the loan, he should get this 're-mortgage' easily. Why did he go to a sub-prime lender ? Bad enough to be in a marriage break up. Double trouble to go to this type of lender.

 

[Brendan Burgess]

A few suggestions.

I am surprised at AIB and I wonder if they are using this as an excuse? Has he some poor credit history? He should check his file with the ICB as a matter of routine.

He should go to a mortgage broker who would be able to identify the best possibility for him.

If all else fails, he could consider remortgaging with the spouse. She gets the €200k and her name is still on the deeds and the mortgage. When he has sufficient resources or lending capacity, he can switch the deeds and the mortgage into his sole name.

Brendan

 

[Bank Manager]

Have to say at face value can't understand why he can't get mortgage. Given that new mortgage amounts to E400k with value of E700k - LTV will be fine. You say he can afford repayments at 7.5% no problem - well if he can he should have no problem organising loan with one of the major providers (as you'll gather I'm with one of the main institutions) - but my strong advice is not to go to a sub-prime lender.

Given his current providers stance which I find unusual if you/we have the full story - does make me think there might be other debts/issues at play which are clouding the issue.

I wish your friend all the best - not an easy time for him.

BM