Transfer of equity, negative equity, 'buying out' ex - considering options

Mewcenary

Hi,

I have posted on this before but it was a while back and the market has moved on etc.

I live in the house which was originally purchased with my now ex. She has gone and I am looking after the place alone. The ownership and mortgage situation is the same.

She put in 10k deposit (I didn't). The house is worth circa 170k, mortgage remaining about 163k and the purchase price was 185k.

Obviously if we sold now we wouldn't get any return and there certainly wouldn't be the 10k deposit back.

The ex is happy for me to take over the property (and so is Nationwide subject to the usual checks). HOWEVER she does want the 10k back... obviously there is no equity to allow that.

I am wondering what to do really. I don't want to throw away being on the ladder (playing the long game, assuming prices would go up... one day).

We are freshly out of the early redemption penalty period. Therefore saving over £200 pcm! I think the best option to my mind is for me to put that money into savings so that when the house does eventually approach a better value, put it towards the 10k to buy her out.

Does this seem basically sensible? Am also contacting IFA...

jenny_13

Has your ex specified when she wants the £10k back by? If she is happy for you to pay back so much a month then do that but she'll probably want a contract drawn up to protect her interests.

VIGILANT22

I think you better ask her if it is sensible 200pcm towards 10K!!

Why are you so set on having this hanging round your neck

Has Nationwide discussed with you the income required for this mortgage

Mewcenary

Oh, no, the 200pcm would just be me saving up towards it. I'd pay the amount all in one go when the transfer happened (With any left-over from savings as required).

My point was more why rush into paying that 10k when right now the property is in negative equity! Therefore making my situation worse!

Nationwide are happy with my situation (income etc) when discussed, subject to the final credit checks which would only happen with a formal application. There are no gremlins in my credit history.

I've been paying it all by myself fine for the last six months or so.

EDIT: Of course, technically the property is not in negative equity now (if succeeded with 170k offer) but there would not exactly be 10k left over. _Technically_ 'not my problem' but I don't really want to be the bad guy here.

TighterThanTwoCoatsOfPain

House bought for £185k, you think its worth £170k, which means if she wants to sell quickly then likely to be £165k tops..

Therefore £20k down between you - looks like she's lucky not to be paying you to ALLOW her off the mortgage given there would be various fees involved in selling which she ought to stump up half of.

Tell her to whistle (IF you can do a transfer of equity)

getmore4less

The actual numbers wil depend on who contributed what.

Here is one example put in your own real numbers.

Bought for £185, any costs on top of that who paid for those?

£10k deposit bought 5.4% (based on £185k but need to work out based on the costs as well)

Now worth £170 less selling costs say £165k

So 5.4% is now worth £8.91K

How was the mortgage(94.6% of purchase) being paid say 50:50(se your own numbers) thats £175/2 = £87.5k at purchase but that is only worth 47.3% of the selling proceeds so £78k so she owes £9.5k on the mortgage.

EDIT : missed the £163k mortgage so £81.5k left(for 50%) so £3.5k owed not £9.5k

So she is net debt/owed of round £600/£5.4k(ish) but that does not take into account the purchase costs, who paid for them and how you split the mortgage.

Any other cost/refurbs will complicate matters depending on how they were paid.