I'm at a Loss. Break ups and mortgages. Help

Kuztardd

deleted thread

StuTheDon

Hi,

Firstly sorry that you are going through a tough time.

An important thing to bear in mind here is if you go with the Post Office fixed deal you will be tied in for 5 years. If you chose to sell next year for example then there will be huge early repayment penalties. Better to stay on the SVR for now.

There is really no right or wrong answer here - the important thing is that you sit down and agree. He probably wants to cut all financial ties and, to be honest, this might be easier. I dont know the circumstances of the breakup (and it is none of my business) but sometimes a completely clean break is best.

I dont know what you salaries are like but would you be able to take on a mortgage yourself? With your 20k you should have enough deposit to buy him out?

Trying_to_be_good

Sorry to hear you're going through this.

Whilst you may want to keep the property, there is a lot to be said for a clean break, selling up and both of you moving on with your lives, as StuTheDon says.

Another thing would be that you shouldn't take the Post Office remortgage if you're not planning to live there - it's a residential rather than buy-to-let mortgage. Rates on teh latter are likely to be higher, but do some research so you're armed with the right information. They'll look at the rental yield rather than your salary multiple, but you'll need a chunky deposit.

Depending on how hard-ball you want to play this, if you own the house 50:50 then it's irrelevant who put in more deposit. Or split the negative equity on the same ratio as the original deposit. There will be legal costs to pay in any case.

Best of luck.

Thrugelmir

Hard facts. You've lost money in the current property market. Don't hold onto the property in the belief that you are suddenly going to recover this capital.

I would suggest that you negotiate the split of the lost equity. Why should you suffer 50% of the loss? On the basis of the deposit the split possibly should be £22,500/ £7,500. Would seem more equitable.

Then split any any actual equity left in the property after all selling costs etc 50/50.

*David*

My own advice, from bitter experience, is when the relationship ends it is best to get a clean break. Trying to move on and get on with your life while your name is still attached to a joint mortgage will be end in tears. It will be impossible for there to be a five year plan that suits you both and renting out a flat is not necessarily a trouble free solution. Take the financial pain now, put it down to experience and move on. I wish I had taken this advice when in a similar position.

Good Luck

getmore4less

Thrugelmir wrote: »

Hard facts. You've lost money in the current property market. Don't hold onto the property in the belief that you are suddenly going to recover this capital.

I would suggest that you negotiate the split of the lost equity. Why should you suffer 50% of the loss? On the basis of the deposit the split possibly should be £22,500/ £7,500. Would seem more equitable.

Then split any any actual equity left in the property after all selling costs etc 50/50.

Say they bought 1/2 the house each and one put down 1/2 as cash the other got a mortgage, using your method the cash person takes the full hit which is clearly not right.

They bought part of the property with the deposits and agreed a non 50:50(£330:£580) split in the mortgage to take account of this so if they got it right they are 50:50 owners overall and that would mean they both take a £15k hit, but the mortgage needs to be paid off at the ratio decided as well.

My working out of the numbers given are,

£230k house £60k:£20k deposit £150k mortgage split £54k:£96(£330:£580)

his share of the assets and debts are £60k + £54k = £114
her share of the assets and debts are £20k + £96k = £116

So not far off 50:50 lets adjust the mortgage to make it really 50:50
sell for £200 and get £100k each.

She is left with £5k after paying off her share of the mortgage
He is left with £45k after paying off his share of the mortgage.


Nice to see someone get this right for a change, well done.


Now as for keeping the place this is a high risk situation long term joint finances are difficult and get worse when new partners come along.

If neither of you can or want to take on the place alone then think carefully about not selling.

With the one stays and rents rooms out the best way to do this is set a market rent for the place and split this 50:50, the other should still keep paying the mortgage as they do now to keep the equity 50:50 and be prepared to contribute 50:50 to any improvments

The person who stays pays the rent and can subsidise this with lodgers

You will probably still fall short with your higher mortgage share if he stays

Might be better for you to stay, 1/2 the rent will probably cover the lower mortgage but does leave the OH with a lot of capital tied up in the place if you don't sell.

This slump could be 10years+ it was the last two times.

If he covers the costs of selling you might get out without owing anything £200k might be a tought sell, might be better to go for offers over £190k and hope you get some.

Conrad

Your loss is pretty small in the scheme of things - £3000 or so. You could lose that from rental voids / having to maintain the place for 5 years. I'd say go for a clean break and move on or you will probably live to regrett having this albatross stuck down your pants. Imagine one of you needs a new mortgage say with a new partner 2 years down the line, having the existing mortgage might present some issues in more ways than you might imagine.

Sorry bout your hurt, but better now than later I guess!

breakingup

Sympathies. In similar situation.
David's comment is worth remembering: things may be relatively civilised now, give it a year when you and/or he have new partners.... the knives may well come out.
If you like living there (as a home, not just an investment) then could you get a mortgage on your own? Then you could rent out the spare room.

Thrugelmir

We do have a legal piece of paper written up that should we split and have to sell the property, whatever we "put in" we "take out" and the surplus or deficit would be equally halved.

Was this done at his parents request?

mariagrafs

Oh I am sorry at your situation.

Valli

Can I add my twopennorth?

If you rent out the property and don't get a tenant you will have problems, also you will probably need to refurbish and/or renovate if and when you come to sell. Who will pay for that?

I would strongly recommend going for the clean break not least because you appear to be able to discuss this amicably at the moment.

Allsorts of things could change - new partners, babies job losses...

Draw a line under it and move on if you can. I'm with David on this one.