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Splitting up - what to do re jointly-owned house

lou777
Posts: 49 Forumite
Hi,
Hope someone can help whilst I try to get an appointment at CAB. My ex and I bought a new house 7 years ago in cash for £200k. I paid 40% and he paid 60%. I signed a declaration of trust to this effect.
Since then, I had a long-term illness that needed private hospital treatment etc and had to keep remortgaging to the tune of £105,000. My share is currently worth approx £95k if the house is worth approx £235k (valuation pending).
The problem is no longer about whether we want to stay together as I need to do the best thing for me financially, regardless of our future. I earn less than him but am paying 78% of the total mortgage (he remortgaged for £30k). I pay 50% of the bills and repairs to the house.
He is offering to buy me out despite having to buy my share worth £95k at a small loss (he would have to take out a £135k mortgage to cover it but only owes £30k himself). I would have to leave my furniture and dog behind and move in with Mum. I am struggling financially but just about manage at the moment. However, even if we stayed together, I am stuck with paying 78% of the mortgage and only ever owning 40% of the house (and profit), so it would be years before I see positive equity and I will always struggle to stay there. Should I just sell it to him and accept I have nothing and start again to save for a deposit on another house, or should I wait until I have positive equity and stay living together during this time? I have lost so much money by trying to keep the house and cannot afford to make the wrong decision.
Any ideas?
Hope someone can help whilst I try to get an appointment at CAB. My ex and I bought a new house 7 years ago in cash for £200k. I paid 40% and he paid 60%. I signed a declaration of trust to this effect.
Since then, I had a long-term illness that needed private hospital treatment etc and had to keep remortgaging to the tune of £105,000. My share is currently worth approx £95k if the house is worth approx £235k (valuation pending).
The problem is no longer about whether we want to stay together as I need to do the best thing for me financially, regardless of our future. I earn less than him but am paying 78% of the total mortgage (he remortgaged for £30k). I pay 50% of the bills and repairs to the house.
He is offering to buy me out despite having to buy my share worth £95k at a small loss (he would have to take out a £135k mortgage to cover it but only owes £30k himself). I would have to leave my furniture and dog behind and move in with Mum. I am struggling financially but just about manage at the moment. However, even if we stayed together, I am stuck with paying 78% of the mortgage and only ever owning 40% of the house (and profit), so it would be years before I see positive equity and I will always struggle to stay there. Should I just sell it to him and accept I have nothing and start again to save for a deposit on another house, or should I wait until I have positive equity and stay living together during this time? I have lost so much money by trying to keep the house and cannot afford to make the wrong decision.
Any ideas?
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Comments
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I don't think your share is worth £95k...if the house is worth £235k and there is a £105k mortgage then there is only equity of £120k (the mortgage company actually own nearly 50% of the property)
If you have a declaration that 40% is yours then he would need to buy you out for £48k
"My share is currently worth approx £95k if the house is worth approx £235k (valuation pending)." that would only be the case if there was no mortgage to repay
how much has he offered you?0 -
I don't mean that I would get 45k. I mean that my share of £235 is about £95k (but my share of the mortgage is 105k so I am technically in 10k negative equity). The total mortgage is 135k, but I took 105k of that personally, so I am responsible for 78% of the mortgage. There is about 100k equity in the property, but the mortgage company isn't interested in whose equity it is - they will just take 235k and pay off mortgage and hand rest back to us, which will all be his.
The 40:60 ownership is a deed of trust, but the 78:22 share of the mortgage is only a verbal agreement.
I don't make it that I get 48k back, I assume I would walk away with nothing as my share is worth 95k but my share of the mortgage amounts to 105k and about 10k of his equity would be used to pay off my debt should we sell.
If he buys me out, we would have to redeem mortgage and then he would have to take another out for 135k and give me nothing.
That's my take on it. He is waiting for me to find out the legalities of it.0 -
I realise you say the relationship is no longer the issue, but it will still affect the decision.
Can you live together, amicably, for perhaps 3 or 5 years? For sure, *really* sure?
Through new relationships forming, and all the day-to-day grind of life under the same roof...
If yes, do it.
If no, don't.
The financial decision flows from there. Its actually a pretty decent offer from him. Even if you *might* be able to handle it, a clean break may be best for all concerned.Act in haste, repent at leisure.
dunstonh wrote:Its a serious financial transaction and one of the biggest things you will ever buy. So, stop treating it like buying an ipod.0 -
Given the amounts of money involved - and as this isn't simple - it definitely seems worth taking legal advice. This doesn't mean you need to go to court to resolve it :eek: but one or two meetings to get a sense of your legal position could be very worthwhile.0
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Presumably the OP took out 105k when 105k was less than 40% of the value of the property. Technically, the OP owes the mortgage payments on 105k.
If the property is valued at only 235k then the OP's share is 94k less costs so let's say 90k. The OP would then find themselves owing 15k to the other party.
However, it is not as simple. If one party stays in the property there would be no sales fees and not consummate purchase fees for another property. Whilst this would still leave the OP some 10k in debt, a simple split with the OP transferring the property and mortgage to a single name would probably be agreeable to the lender and ther OP might find that the ex partner can live with the current negative equity.
That is what I would advise. Talk it through, get the lender to agree and then and only then go to see a lawyer.0 -
Well, latest update is house is worth 230-235k. Ex suggests that a relative buys me out by paying off 92k of my share of the mortgage in cash, leaving me with no home and owing 13k on mortgage. I pointed out that this wouldn't happen as mortgage would need to be redeemed and then he would have to take out new one for 30k after we paid redemption fees, which would come out of his equity, as would my debt (mortgage company would give back equity and wouldn't care whose debt it was). He said that I would have to move out and pay him back 13k then, which obviously I would never agree to as it would leave me unable to live anywhere or save for a new house.
Therefore, I concluded that our only option is to stay living together until house prices rise. I am OK with this but he is not. However, he cannot force me to sell as he needs my permission as the house is jointly owned. After calming down, he concluded that he wasn't ruling out taking on my debt and keeping the house (as he knows he would eventually make a profit).
I cannot even pay the redemption fee or in fact any costs of selling etc, so if he did want to sell or buy me out now, then he would have to take loss from his equity. I don't want him to have to do this, but am not being forced to be in debt for years just because he wants me to leave.
I did suggest carrying on paying the mortgage and moving out to Mum's house as a last resort but there is enough room in the house to stay. We don't argue - he just wants me to go because we are no longer together and he wants to move on. I do too, but not if I am going to have to suffer financially.
Guess I need to speak to CAB but can't get hold of them over the phone. I may have to wait until I have a day off near Christmas. Nothing is going to happen until after Christmas anyway.
Regarding living together and having new relationships...it's not great but we have done it before!0 -
Well, latest update is house is worth 230-235k. Ex suggests that a relative buys me out by paying off 92k of my share of the mortgage in cash, leaving me with no home and owing 13k on mortgage. I pointed out that this wouldn't happen as mortgage would need to be redeemed and then he would have to take out new one for 30k after we paid redemption fees, which would come out of his equity, as would my debt (mortgage company would give back equity and wouldn't care whose debt it was). He said that I would have to move out and pay him back 13k then, which obviously I would never agree to as it would leave me unable to live anywhere or save for a new house.
Therefore, I concluded that our only option is to stay living together until house prices rise. I am OK with this but he is not. However, he cannot force me to sell as he needs my permission as the house is jointly owned. After calming down, he concluded that he wasn't ruling out taking on my debt and keeping the house (as he knows he would eventually make a profit).
Am I misreading this? Your ex suggested that you give him £92k cash + £95k-ish equity in the house + pay him back £13k later - in order for him to agree to take on £105k mortgage :eek:
Get legal advice, seriously.0 -
LOL, no not that bad. He wants his brother to buy me out and for me to walk away with nothing and pay him back 14k, though he is considering the fact that he would have to foot the 14k loss himself in order to convince me to go. However, I think the result would be that I would struggle to get any furniture back that I have paid for and the logistics of me moving out are just too difficult.
The upshoot of this tonight is that I have decided to stay put and wait til the market improves and I have paid off more of the mortgage. He is very unhappy with the decision and I should imagine his brother is too, as he saw my misery as a financial opportunity. I think this is the only right decision as there is doubt over we might get back together.0 -
Why don't you rent a room in a shared house or flat, he take a lodger in the house to cover your half of the mortgage?? It doesn't sound to me like there is doubt over whether you might get back together (sorry); surely staying living together is more likely to make your relationship strained than living apart??Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
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Hi,
Hope someone can help whilst I try to get an appointment at CAB. My ex and I bought a new house 7 years ago in cash for £200k. I paid 40% and he paid 60%. I signed a declaration of trust to this effect.
Since then, I had a long-term illness that needed private hospital treatment etc and had to keep remortgaging to the tune of £105,000. My share is currently worth approx £95k if the house is worth approx £235k (valuation pending).
The problem is no longer about whether we want to stay together as I need to do the best thing for me financially, regardless of our future. I earn less than him but am paying 78% of the total mortgage (he remortgaged for £30k). I pay 50% of the bills and repairs to the house.
He is offering to buy me out despite having to buy my share worth £95k at a small loss (he would have to take out a £135k mortgage to cover it but only owes £30k himself). I would have to leave my furniture and dog behind and move in with Mum. I am struggling financially but just about manage at the moment. However, even if we stayed together, I am stuck with paying 78% of the mortgage and only ever owning 40% of the house (and profit), so it would be years before I see positive equity and I will always struggle to stay there. Should I just sell it to him and accept I have nothing and start again to save for a deposit on another house, or should I wait until I have positive equity and stay living together during this time? I have lost so much money by trying to keep the house and cannot afford to make the wrong decision.
Any ideas?
Sounds to me your ex has made you a VERY generous offer and if it were me, I would bite his hand off"A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0
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