Mortgage Lender said Apply as Married, but I'm Not Sure

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USByeah

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Asking for a friend...

A guy I know is going through a separation but his ex is non-cooperative. He is unable to get a legal separation agreement.

He explained his circumstances to each mortgage lender he contacted. Three refused to proceed because of the lack of the separation agreement, one said they would provide the mortgage, and that he should check the 'Married' box instead of 'Separated'.

He has no court order payments for maintenance or child support, though he makes monthly payments. He's on a good income and qualifies for the mortgage easily. The property he wants to buy is a fixer-upper in the midlands. He has two children with his ex and a home in both their names with a very small mortgage that she and the children occupy.

The mortgage lender is obviously eager to give him the finance, but is it ok to make Married instead of Separated? Is that acceptable because there is no court orders and only an informal separation, or will this come back to haunt him?
 
It won't work.

Both parties to mortgage would have to sign / provide ID etc.

Simplest solution is to apply for a Divorce, once they have been living apart for two years.

Divorce cannot be contested once the relevant conditions are satisfied.
 
I imagine the bank were intending doing the mortgage as a BTL in a sole name which is fine, don't see why she'd have to be party to the mortgage in that instance. It's just messy though from the point of splitting assets when they do sort out things, does he want her having some claim on it? Although it will have a mortgage there is obviously some equity going into it.

It's definitely flirting with the truth! While he is separated he is also married legally so it would be neater to get it all sorted first before he purchases another property particularly regarding having rights to each others future property boxed off.
 
Thirsty said:
It won't work.

Both parties to mortgage would have to sign / provide ID etc.

Simplest solution is to apply for a Divorce, once they have been living apart for two years.

Divorce cannot be contested once the relevant conditions are satisfied.
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The lender told him to go as a single applicant. She won't have to sign.

She is non-cooperative. Late making an appearance after he filed for divorce. Doesn't seem to have mattered, she just got lots more time. With the pandemic, other delays have kicked in too on the side of the courts.
 
Monbretia said:
I imagine the bank were intending doing the mortgage as a BTL in a sole name which is fine, don't see why she'd have to be party to the mortgage in that instance. It's just messy though from the point of splitting assets when they do sort out things, does he want her having some claim on it? Although it will have a mortgage there is obviously some equity going into it.

It's definitely flirting with the truth! While he is separated he is also married legally so it would be neater to get it all sorted first before he purchases another property particularly regarding having rights to each others future property boxed off.
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I don't think he cares if she has a claim on it. Worst case they'd have one house each. He's middle-aged and freaked out by the rising cost of housing and concerned he won't be able to secure any kind of house in the future.

The lender double-checked that it was ok to put the application as married, but they didn't put that in writing.

"I imagine the bank were intending doing the mortgage as a BTL in a sole name which is fine, don't see why she'd have to be party to the mortgage in that instance."
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If he bought it and rented it for a period (or rented part as a house share with him) would that be acceptable for the banks?
 
If he doesn't have
A judicial separation,
A divorce
Or a separation agreement
Congratulations! He's married!

That's the legal fact.
Where this will get complicated is when/if he divorces/legally separates.
Any asset he gets a mortgage for now is part of the pot when it comes to splitting up the "family assets".
Does he really want that headache?
 
If he doesn't have
A judicial separation,
A divorce
Or a separation agreement
Congratulations! He's married!
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They live separately though. What you say makes sense because they're not legally separated, but is it a bit of a grey area?
Any asset he gets a mortgage for now is part of the pot when it comes to splitting up the "family assets".
Does he really want that headache?
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I think the options are the future headache of splitting assets with two houses, opposed to the future headache of being homeless and too old to get a mortgage or priced out of the market.
 
USByeah said:
They live separately though. What you say makes sense because they're not legally separated, but is it a bit of a grey area?

I think the options are the future headache of splitting assets with two houses, opposed to the future headache of being homeless and too old to get a mortgage or priced out of the market.
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That asset may be considered part of any future settlement and he could end up in a real mess. What does his solicitor (dealing with legal separation/divorce) advise him to do? Does he have a court date lined up? Whats his plan regarding first property? Is one party buying the other out (transfer of equity)?
 
That asset may be considered part of any future settlement and he could end up in a real mess.
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What would a real mess be? Dividing the assets being a mess or legal trouble?

She has just entered mediation via a solicitor (after 2 years informally separated and I think 6 months after applying for divorce). I don't think there is a court date lined up. She only recently made an appearance and has dragged her heels to this point. It seems the courts are still dealing with a pandemic backlog too. I guess one party will buy the other out or eventually sell the house.
 
USByeah said:
What would a real mess be? Dividing the assets being a mess or legal trouble?
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I think the point is that your friend could end up worse off as it will appear to the judge that there are two assets to be divided, not one.

I appreciate that there other factors like needing to demonstrate to the court for custody that he can house the kids.

He should look potentially at other options if he has them, such as a family member buying the house and him living there at a caretaker rent.

IANAL, and have now expertise on this, but there are plenty on this thread who have pointed out potential complications.
 
USByeah said:
f he bought it and rented it for a period (or rented part as a house share with him) would that be acceptable for the banks?
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He never has to let it, the bank are just doing it as a Buy To Let product, as someone says above he's legally married and perfectly entitled to buy a second property in his own name if he can afford it.

Again the hassle comes in splitting the stuff later.
 
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