Buying bf out of house

pollyanna24

Just wondered about the basics about this as I have no idea.

Me and bf are (probably) in the beginnings of breaking up.

We have a 14 month old daughter and he is a stay at home dad.

I don't want to lose our house if we break up. Not sure what he will do, but as I am the one who earns all the money, I was wondering how I went about buying him out.

Not sure if to help me figure this out, you need figures, but they are:

Purchase price (2006) - £210k
Morgage outstanding - £170K
Valuation of house - £220-£230K

Anything else needed? I really have no idea.

How do I go about it? Do I need to find a loan for the equity or something?

Caz3121

if you are going to buy him out at 50/50 then you need to calculate the equity
say it is 220 now, 170 to pay off mortgage = 50k = 25k each
you would need a mortgage for £195k (£170k for the existing mortgage + £25k to give him) which is just under the 90% LTV (this is assuming you don't have savings you can use to buy him out)
do you have an income that will support that alone

pollyanna24

Thanks for that. I thought it might be something along those lines.

At the moment, we have a 5 year fixed mortgage for the outstanding balance of £175K under our joint names (but I pay the full mortgage as I am the only one earning).

So would I now need to find a loan for £25K to buy him out? Don't think there is any way I could add the mortgage as the original loan of £185K was based on both our earnings back in 2006 and now it is just me working.

pollyanna24

Just as an added bit, the 5 year fixed does not run out till April 2013, and we have to pay £5,000 if we break it.

What bout legal fees if I wish to buy him out? I wokr for a lawyer who will do what he can (for free probably), but do we still have to pay stuff like the £5,000 above if I buy him out?

Oldernotwiser

As the child's main carer, wouldn't it be better if he stayed in the house - surely that's what normally happens?

mark5

I bought my home in 2006 at £216,000 and know its worth less today, I would be supprised if yours is worth more than 2006 prices unless you bought very well. This would be to your advantage though if you are going to be buying your ex out.

poppysarah

in the beginnings of break up?
Sit down and sort it out.
Try relationship counselling.

amcluesent

TBH I can't see how the finances stack up, allowing you to keep the house.

You don't say how much initial capital he put in, which any need to returned as part of the buy out. Then you imply he paid a proportion of the mortgage until the baby arrived; if so, he's be due/liable for the equivalent proportion of capital gains/loss on the difference of the purchase price and the agreed valuation now.

After he's been bought out, you'd remain liable for servicing the mortgage; doubly tricky as, given the change of circumstances, your mortgagee could call in the loan.

haras_nosirrah

Another factor has to be who is going to look after the little one. If your boyfriend has had to stop work to look after a child will he take custody or will you have custody in which case you will have to give up/ reduce work and may be unable to afford the property and pay for child care. Your case of - I earn the money therefore I should keep the house, is only because he gave up paid work to look after your daughter. He may want to go back to work if you split?

princeofpounds

The basics are that you need to be able (and permitted by the lender) to take on the whole mortgage, cover any fees, and buy out his 50% share of the equity. If you can do this then you can keep the place, if not you should sell and split the equity.

Fire_Fox

pollyanna24 wrote: »

Just wondered about the basics about this as I have no idea.

Me and bf are (probably) in the beginnings of breaking up.

We have a 14 month old daughter and he is a stay at home dad.

I don't want to lose our house if we break up. Not sure what he will do, but as I am the one who earns all the money, I was wondering how I went about buying him out.

Not sure if to help me figure this out, you need figures, but they are:

Purchase price (2006) - £210k
Morgage outstanding - £170K
Valuation of house - £220-£230K

Anything else needed? I really have no idea.

How do I go about it? Do I need to find a loan for the equity or something?

Have you thought about relationship counselling? Who is going to retain custody of your daughter, that person obviously needs a house rather than a rented flat if at all possible. The other party will need to pay child support which may affect your calculations? Although you earn all the money, your boyfriend's contribution to the running of the household may be taken into consideration in any settlement - you should both get legal advice on this.