Q I have a mortgage on a flat I bought in 2003 in England with my then partner. Unfortunately he left me and moved away three weeks after moving into our flat. He did not contribute towards the deposit or to any of the mortgage payments. In 2008 my new partner and I moved to Edinburgh where we live with our son. We have another baby on the way. My flat has been rented out but is currently unoccupied. We have tried various ways to get my ex's name off the mortgage, and my ex has agreed to this, but my lender has refused. I do not meet their affordability criteria, despite having paid the mortgage by myself for many years.
My new partner has a flexible mortgage with the same lender as me, and sufficient credit to pay off my mortgage. He has a good job as a finance director and is financially secure.
We had hoped that by him using his flexible mortgage to pay off mine, we would be able to transfer the mortgage into my sole name and also save several hundreds of pounds in repayments each month, as his interest rate is much lower than mine. Unfortunately, his application was turned down and they have not given us a reason for this.
As it stands we are in a desperate position, as the higher monthly payments are financially crippling, particularly with no tenant in the property. My partner is now effectively paying the mortgage on my flat, since I work part time and will be on maternity leave from November.
We cannot understand why our lender feels it is a better option to maintain the status quo, and feel it is deeply unfair. If nothing changes we will possibly be driven to default on my mortgage and I will lose any financial security which I worked so hard to keep when my ex walked out 10 years ago. EF
A I am a little confused. If your partner has
sufficient credit on his flexible mortgage to be able to pay off the mortgage on your flat, he wouldn't have had to make an application to his lender to spend the money. So I suspect he applied for an increase in his mortgage loan to be able to raise the cash to clear your mortgage. If he wants to know why his application was refused, he can ask. Although it is unlikely that the lender will give precise reasons why he was turned down, he should at least be told the broad reasons, which could be affordability, being let down by a credit score, or the result of information supplied by a credit reference agency. It could well be that your lender doesn't offer mortgages for buy-to-let, which is essentially what he was applying for.
Even if your partner had got the loan he wanted, by paying off your mortgage he would have made you mortgage free; it wouldn't have meant that the mortgage would be in your sole name. Rather, he would have had one mortgage in his name covering both the home you live in and the flat you own in England.
If you don't want to rely on your partner paying your mortgage and your flat remains without a paying tenant, the most obvious solution would be to sell it and pay off the mortgage with the sale proceeds. If you don't want to sell, or can't, another option would be to see if you can switch your mortgage to a different lender offering better terms than your current one.
When considering buy-to-let mortgages, which is what you would need, many lenders take into account potential rental income rather than earned income, so the fact you work part time shouldn't make a difference.
However, to be able to switch to a buy-to-let lender the mortgage would have to be no more than 75% of the value of the flat and the rental income would have to cover the mortgage repayments by 125%.