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Mortgage with only maintenance as income

melonfool
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Mortgage with only maintenance as income

#138454

Postby melonfool » May 11th, 2018, 11:28 pm

Hi

Does anyone know if it's possible or likely to be able to get a mortgage when one's only income is spousal maintenance?

The only articles I can find on this are 1) very old (most recent being around 2004) and 2) only talking about child maintenance. I know spousal maints is very rarely awarded but it will be either awarded or agreed (and then tied up in a proper court order) in this case, but the issue is that a house needs to be provided somehow.

It is vaguely possible that there will be some pension income too, but only around £1k pm at most, and I'm not sure if mortgage lenders accept that income either. And it obviously isn't enough to live on and pay a mortgage.

The final issue being age - the person in question is 58, will be 59 or more by the time this is settled, so I suspect may not get a mortgage at all anyway.

thanks

Mel

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Re: Mortgage with only maintenance as income

#138486

Postby DrBunsenHoneydew » May 12th, 2018, 8:39 am

Some lenders say they will “consider” spousal maintenance though usually need evidence of either court mandate or prolonged regular voluntary payments, and might not be counted at full value for the income multiple allowed.
Pension income is certainly widely accepted (company, state and SIPP drawdown).
Upper age limits for mortgages are gradually moving up- Nationwide was in the news recently for moving up to age 85 provided you start by age 80 and Hodge Bank go to 95.
There are a number of Retirement / Lifetime mortgages for appropriate circumstances but often need broker input or phone application to check borrower understanding.

melonfool
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Re: Mortgage with only maintenance as income

#138509

Postby melonfool » May 12th, 2018, 11:15 am

Thank you, that is more or less as I thought - the info I could find said some will take 60% into account.

So, it seems to me she needs to get the pension bit sorted at the same time to have any chance of a mortgage. Which is a pain as it will be early so she'll get a reduced value.

Mel

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Re: Mortgage with only maintenance as income

#138514

Postby AleisterCrowley » May 12th, 2018, 12:19 pm

Upper age limits for mortgages are gradually moving up- Nationwide was in the news recently for moving up to age 85 provided you start by age 80
Interesting - I'd assumed that, as a 52 year old with retirement age 60,I wouldn't be able to get a mortgage

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Re: Mortgage with only maintenance as income

#138646

Postby tjh290633 » May 12th, 2018, 9:41 pm

There is an article in Today's Daily Telegraph about interest-only mortgages making a comeback.

https://www.telegraph.co.uk/personal-ba ... ch-market/

It's a "Premium" article, so you have to be registered or a subscriber to read it all.

Lenders have launched the first in a new breed of interest-only mortgages for older borrowers.

In March the Financial Conduct Authority (FCA), the City watchdog, confirmed changes that would allow mortgage companies to offer interest-only loans with no fixed end point.

The technical change will mean those approaching the end of their loans who have no means to repay the debt won't be forced to sell their homes – providing they pass the necessary affordability checks.


TJH

melonfool
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Re: Mortgage with only maintenance as income

#138657

Postby melonfool » May 12th, 2018, 10:02 pm

tjh290633 wrote:There is an article in Today's Daily Telegraph about interest-only mortgages making a comeback.

https://www.telegraph.co.uk/personal-ba ... ch-market/

It's a "Premium" article, so you have to be registered or a subscriber to read it all.

Lenders have launched the first in a new breed of interest-only mortgages for older borrowers.

In March the Financial Conduct Authority (FCA), the City watchdog, confirmed changes that would allow mortgage companies to offer interest-only loans with no fixed end point.

The technical change will mean those approaching the end of their loans who have no means to repay the debt won't be forced to sell their homes – providing they pass the necessary affordability checks.


TJH


Thank you - interest only won't work as the whole point is to provide security and independence in old age, if going interest only she may as well rent.

Mel

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Re: Mortgage with only maintenance as income

#138658

Postby melonfool » May 12th, 2018, 10:03 pm

AleisterCrowley wrote:Upper age limits for mortgages are gradually moving up- Nationwide was in the news recently for moving up to age 85 provided you start by age 80
Interesting - I'd assumed that, as a 52 year old with retirement age 60,I wouldn't be able to get a mortgage


You don't have to retire at 60 though.

Cheery thought - work longer to buy a house!

Mel

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Re: Mortgage with only maintenance as income

#138693

Postby AleisterCrowley » May 13th, 2018, 2:00 am

Well I have to go home before I'm 57, otherwise I'll have spent more than 50% of my life in the south, and will lose my Shropshire nationality ..

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Re: Mortgage with only maintenance as income

#138748

Postby Alaric » May 13th, 2018, 11:14 am

melonfool wrote:Thank you - interest only won't work as the whole point is to provide security and independence in old age, if going interest only she may as well rent.


You get more security of tenure with ownership even if mortgaged.

Lender terms permitting, if surplus funds are available it's always possible to emulate a repayment mortgage by periodically paying off some of the debt. It reduces future interest payments, giving rise to a snowball effect. Or otherwise surplus income could be accumulated outside the mortgage, with a view to using the proceeds to eventually repay.

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Re: Mortgage with only maintenance as income

#138830

Postby Lootman » May 13th, 2018, 3:54 pm

AleisterCrowley wrote:Upper age limits for mortgages are gradually moving up- Nationwide was in the news recently for moving up to age 85 provided you start by age 80
Interesting - I'd assumed that, as a 52 year old with retirement age 60,I wouldn't be able to get a mortgage

You would be able to get a mortgage but maybe not for a term of more than 8 years, if that limit were strictly applied. I am already retired and was offered a 5-year mortgage by NatWest. In the end I didn't bother.

But as noted elsewhere, this limit is being eroded, and that makes perfect sense particularly if you are putting down a sizeable down payment. Worst case the Bank can foreclose and get its money back.

To the original question I had always thought that spousal maintenance goes away if that spouse remarries, so might that be a risk to the lender?

melonfool
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Re: Mortgage with only maintenance as income

#138839

Postby melonfool » May 13th, 2018, 4:19 pm

Alaric wrote:
melonfool wrote:Thank you - interest only won't work as the whole point is to provide security and independence in old age, if going interest only she may as well rent.


You get more security of tenure with ownership even if mortgaged.

Lender terms permitting, if surplus funds are available it's always possible to emulate a repayment mortgage by periodically paying off some of the debt. It reduces future interest payments, giving rise to a snowball effect. Or otherwise surplus income could be accumulated outside the mortgage, with a view to using the proceeds to eventually repay.


That is true, worth bearing in mind - thank you.

She will not be able to accumulate any extra funds or overpay on the pension and maintenance I shouldn't think. BUT, there is a possibility of a future lump sum which the divorce would include being split, so this might be worth considering.

Thanks
Mel

(it goes against everything I would ever suggest to anyone though, to go on an interest-only mortgage! But, hey ho, different circumstances)

melonfool
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Re: Mortgage with only maintenance as income

#138842

Postby melonfool » May 13th, 2018, 4:21 pm

Lootman wrote:To the original question I had always thought that spousal maintenance goes away if that spouse remarries, so might that be a risk to the lender?


Which spouse?

The person in question here, the claimant, is not going to remarry. The husband is likely to.

But, no, the option for later claims goes away if the claiming spouse remarries, but agreed and/or court ordered maints stays. How could it be otherwise? The man (as it is in this case) would just marry anyone to be able to stop paying his ex wife, wouldn't he?

Mel

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Re: Mortgage with only maintenance as income

#138844

Postby Lootman » May 13th, 2018, 4:27 pm

melonfool wrote:
Lootman wrote:To the original question I had always thought that spousal maintenance goes away if that spouse remarries, so might that be a risk to the lender?

Which spouse?

The person in question here, the claimant, is not going to remarry. The husband is likely to.

But, no, the option for later claims goes away if the claiming spouse remarries, but agreed and/or court ordered maints stays. How could it be otherwise? The man (as it is in this case) would just marry anyone to be able to stop paying his ex wife, wouldn't he?

I meant that if Mr A pays maintenance to Ms B, and then Ms B remarries, then doesn't Mr A's obligation to pay the maintenance cease?

At least that is how I understood alimony works, whereas child support is unaffected.

But if "maintenance" is something different from either of those then I confess that I don't know how that works. I've never divorced. But I definitely know of a woman who is not marrying her new boyfriend because the payments from her ex would then cease, and she wants her ex to carry on paying!

melonfool
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Re: Mortgage with only maintenance as income

#138846

Postby melonfool » May 13th, 2018, 4:34 pm

Lootman wrote:
melonfool wrote:
Lootman wrote:To the original question I had always thought that spousal maintenance goes away if that spouse remarries, so might that be a risk to the lender?

Which spouse?

The person in question here, the claimant, is not going to remarry. The husband is likely to.

But, no, the option for later claims goes away if the claiming spouse remarries, but agreed and/or court ordered maints stays. How could it be otherwise? The man (as it is in this case) would just marry anyone to be able to stop paying his ex wife, wouldn't he?

I meant that if Mr A pays maintenance to Ms B, and then Ms B remarries, then doesn't Mr A's obligation to pay the maintenance cease?

At least that is how I understood alimony works, whereas child support is unaffected.

But if "maintenance" is something different from either of those then I confess that don't know how that works. But I definitely know of a woman who is not marrying her new boyfriend because the payments from her ex would cease, and she wants her ex to carry on paying!


We don't use the term 'alimony' in the UK or 'child support', we use 'spousal maintenance' and 'child maintenance'.

I will make sure her agreement says it continues if she remarries - she won't remarry but that will ensure the banks don't get cold feet over that potential aspect. It could be why they don't take it into account I suppose (or don't take it into account at 100%).

Mel


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