"Mortgage lenders trapping unhappy couples
Mortgage lenders want bigger deposits, are more cautious about how much they will lend and are no longer agreeing to cheaper interest- only loans.
Some refuse to count divorce maintenance payments received from a former spouse as income, or will only do so after a minimum period of continuous payments. NatWest, for example, wants to see six months of payments before it will include maintenance as income. Nationwide Building Society, meanwhile, demands three months of payments, backed by a formal or court agreement.
However, outgoing maintenance payments are usually counted as expenditure, reducing the borrowing power of the former spouse – which is usually the husband – who pays."
I recall a few years ago I could find only one building society that would take my spousal maintenance into account - but the terms were so much worse than a normal mortgage that I couldn''t afford to go ahead and buy out my ex''s share.
Anyone had better experience?
I don''t see anything new here? I thought it had always been that way?
SM is not really regarded as a reliable source of income. The mortgage company would be foolish to grant a mortgage based on an income from someone who they have not credit checked. And why would the husband give permission for himself to be credit checked so that his ex wife can get a mortgage? As for the husband, well of course it is an expenditure, money is leaving his account every month just like that LoveFilm subscription. So I am afraid, I agree with the banks logic here.
As for interest only, well that has a whole set of problems all of its own. Many people who are on interest only, really shouldn''t be. Interest only is only for people who know what they are doing. It''s very risky if you aren''t good at long-term financial management, you could find yourself homeless when the term of the mortgage ends.
I can''t see it as mortgage lenders "trapping unhappy couples" at all. It is mortgage lenders looking after their own backs. As they have always done. As every company has always done. It may be harsh on divorcees but I see nothing new here. In this economy it''s harder for graduates, first time buyers, young married couples, growing families who need a larger house, the elderly - everyone.