Mortgage after a split - advice requested.
Not me, but my younger brother. I’ve been asked for financial advice as I’m generally pretty good with this kind of stuff, but I’m out of my depth here.
He bought a house with his fiancé 3 years ago for around £185k on a 30 year term, with 5 year fixed at about 2%, 95% LTV. Rate ends next November and jumps to SVR.
Current mortgage is £166k, monthly payments around £700 pcm, house worth £200-£210k.
They’ve split up. She wants her share of the equity. He can just about afford the mortgage by himself and doesn’t want to move. He has pay rises scheduled over the next few years.
Short term cash to pay off the fiancé by an agreed amount isn’t the problem. The problem is the mortgage:
His pay is around £32k pa. By every estimate I’ve found, no one is going to lend him more than £140k. Santander, who the mortgage is with, have suggested closer to £90-100k when he first asked them about this by phone.
It might be possible to get a Sole Owner Joint Borrower mortgage (guarantor) but his mortgage is with Santander, and my research shows they don’t offer that.
ERC for the mortgage is £8k, which is painfully punitive.
The fiancé absolutely wants to be removed from the mortgage ASAP to free her up to get another place, presumably with another man. She’s paying her half until this gets resolved either by pay off, or by sale and split the proceeds (which won’t be much after the ERC and selling fees, and will leave my brother without a home).
What do people do that find themselves in a situation like this - they are suddenly solely responsible for a mortgage that is beyond
their normal borrowing criteria? Any advice I can pass on gratefully received.
So far I’ve suggested going for a sit-down with a mortgage advisor from Santander. I thought SOJB was the solution, but I don’t think Santander will go for it.