A bit of a strange one....

[Claymore]

Hi

I've got a bit of a strange query here.

My friend who is divorced from her husband (but they are very loyal friends), wants to remortgage her property. Problem is she is on one of these ridiculously low hour contracts and is therefore not in a permanent job.

Ex-husband is happy to take the mortgage out in his name as he has a permanent job . I am thinking there are risks associated to this.

Am I right in thinking he would become a legal owner on her property - also, would SDLT have to be paid based on the market value of the property?

Many thanks
Claymore

[King_Maker]

Yes, he would have to be the legal owner as he would be the mortgagor. Is joint names an option?

With the correct paperwork, there should not be any SDLT nor CGT.

She should check out the implications with her solicitor.

[jpkeates]

Sensibly both parties shouldn't get involved at all.
With all the backstory removed, the question is "should person a buy a house for person b who can't afford it themselves".

Why does the ex-wife want to remortgage?

[Claymore]

As I say, although they are divorced, they are incredibly loyal to each other (they really shouldn't have divorced). My friend only works part-time because her ex - although he doesn't have any legal obligation pays her a figure every month, so that she doesn't have to work full time.

She only has a tiny mortgage £30K and she just wants to consolidate her mortgage reserve (£5k) - with her mortgage, and take some extra for an en-suite bathroom to be built. Mortgage reserve is on interest only. Also the existing mortgage is about 5%. The property is valued about £250k so she should be on a much lower interest rate.

[jpkeates]

He should guarantee her mortgage.
While if she stops paying, he's liable, it sounds like he might as well be.

That keeps her owning the house.
Even with a low income, a mortgage should be doable with the surplus value of the equity and a guarantor.

[Claymore]

Brilliant - thanks for that advice. I'll pass on info.