Self Certified mortgages

I'm trying to help a friend out, my neighbour in fact!

He and his wife bought their place in Marbella about 4 years ago for circa 600k, and paid in full having sold their assets in UK.

They remained non resident but, like many ,live in Spain virtually full time.  He is a qualified electrician and earns enough cash to live the life and pay his bills. Typically he doesn't keep accounts and works cash in hand.

Over the last year or so,he has had some problems domestically and this has resulted in divorce . His ex-wife has moved out on the basis of a Court Order that he pays the sum of 100k to her in twelve months time. He does not want to sell the house in these difficult times and assumed he could borrow this relatively small sum on a self certified basis against the collateral of the house which remains debt free in joint names until the Court Order is met. At this point  the house becomes his.

Unfortunately no-one in the UK or Spain seems to want to lend and he is panicing over the consequences of not meeting the terms of the Court Order. 

Are there any financial gurus out there with possible solutions or has he just put off the inevitable?

Hi Dealerjm,

Sorry to hear of your neighbours sad circumstances and I am sure this is very stressful for him.  Although there are Equity Release products around, unfortunately they will not be granted on a Self Cert basis, all income must be sufficient and provable. indeed even if he did have accounts etc. Lenders are very reluctant to sanction mortgages for divorcing couples due to the stake in ownership, where the property is in joint names i.e. 50/50 part owners.

Thanks Sharon

It's a shame because he's a nice guy and we'd like to keep him as our neighbour.  He hasn't enough time before the Court Order takes effect to find an employed position and prove his income, but he is a non-resident anyway so possibly this avenue is closed to him.

As he has put the majority of the cash into the house, I feel sorry for him as the local valuers are suggesting Euro 380k for a guaranteed sale in the time frame he has. He'll barely have enough from the proceeds to buy a small townhouse whilst his wife has moved in with a guy who owns a large villa.

Sometimes life can be really unfair!!

This is such an awful situation to find yourself in.  I really feel for your neighbour, the only thing i can think of and it is far from being the best option is to try and get a private loan, they charge a huge amount of interest and normally it has to be refunded in 12 months but this might give your neighbour a little time and the possibily of selling the house for a little more.

Other than that I would recomend to call Bank of Scotland in Gibraltar as it is not the first time i have heard that they can be very helpful in getting people mortgages even with no registered income.

Joan

Has he tried to rearrange the terms of the agreement? What is his age?

Unfortunately he hasn't shared the exact detail of the Court Order, only that he has to settle the amount by November. I asked what happens then if it's not settled. He suggested the ex wife can seek a forced sale through the Court or resume residence at the house. I'm not sure if this is factual, but I guess non compliance of an Order of the Court does give the Court some leverage. Whether this all takes time to expedite I don't know as I was approaching this from a financial solution rather than a legal solution, but he has said he hopes to approach his ex-wife and ask if she will take less. Even so he still will need to secure funds if she agreed and my view is this agreement is unlikely knowing the asset value of the villa.

I believe he had a lawyer at the Court, but of course continued legal assistance only involves more cost and he thought having secured the agreement, finding funds would not be the problem it has turned out to be.

I think he is 52/53?