Splitting from partner on Joint Mortgage

rockinmuse

Hello,
Please could you help me with mine and my ex partners situation.

We bought a house (our 2nd house together) late last year. The house cost approx £158k and we put a deposit down of £16k. We have recently broke up, on mutual terms and are wondering about what is best to do regard the mortgage.

I’ve contacted the mortgage company to enquire to take my girlfriend off the joint mortgage however they are not willing to let me take on the whole mortgage as I can only borrow from them approx £100k, there is £142k outstanding on the mortgage.
They are not prepared to let me replace my partners name on the mortgage with a guarantor or one of my parents. As I understand it, the only way I can keep the house is by getting £42k from my parents plus covering any early repayment charge, paying for the mortgage fees and solicitors. I.e. the whole process costing approx £45k + paying my girlfriend off + I would also have to pay off any loans I have.

The other alternative is of course to sell. However my girlfriend and I are doubtful about getting certainly anymore than the £160k that we bought the house for, as well as having to pay all the fees involved, and also the mortgage is fixed until August 2011 so also we will have to cover the get out fees.

I’ve offered to buy out my girlfriend unofficially. So she would leave the house and I will just pay all the mortgage and bills if she will come to some sort of arrangement that she will not try to get any money back from the house. However this puts her at the disadvantage of not being able to get another mortgage should she find somewhere else to buy.

Are there any alternatives that I’m just not seeing or anything worth adding about the situation? Thank you for reading.

Cannon_Fodder

The "in limbo" club is growing by the day, I'm afraid.

Its not much consolation, but you are not alone. And at least you are probably not in negative equity. (hope you are not in NI)

You could try researching the market in your area - some areas have gone up a little, others are still flat - a sale might get a little more than you think.

There is no certainty that prices will not repeat the 90s, which would mean a gradual drop over the next 5 years...a 6-12 month wait might be doable, but 5 years..?

getmore4less

"limbo club" like it.

Another way out is to agree some limbo situation that is neutral on cost then the first one to shack up with someone else does the buyout.

Taking the hit and selling now to remove the financial connection is the sensible long term thing to do, this risk of it just getting mesy later just goes up with time.

namzij

There is another alternative but this really depends on the rental coverage.
Say Market Value is £160,000
Mortgage is £142,000
What is the Mortgage per calender Month?
What is the Rental per calender Month?
If Rental is greater than Mortgage, great!

Solution:
Lease Option the property, i.e. leasing the property out to someone with an option to buy it. Sell property for £160K on a 10 yr lease( length in time allows for capital growth). Of course both you and your ex have to be agreeable as you 'll still own the property.

VIGILANT22

namzij wrote: »

There is another alternative but this really depends on the rental coverage.
Say Market Value is £160,000
Mortgage is £142,000
What is the Mortgage per calender Month?
What is the Rental per calender Month?
If Rental is greater than Mortgage, great!

Solution:
Lease Option the property, i.e. leasing the property out to someone with an option to buy it. Sell property for £160K on a 10 yr lease( length in time allows for capital growth). Of course both you and your ex have to be agreeable as you 'll still own the property.

Dont even think about it!
By the looks of this namzij and the other post they targeted they're on here looking for vulnerable people........beware!

Cannon_Fodder

If they still own the property, then the Lender will also want to be happy.

Lease/rental/BTL option is likely to need 25% equity.

Annisele

Your offer to buy your ex out "unofficially" doesn't just put her at a disadvantage if she wants to buy somewhere else. It also leaves her in a very vulnerable situation if you decide (or are forced, for whatever reason) to stop making mortgage payments.

So far as the lender is concerned, the two of you are both equally responsible for the mortgage payments. If you stop paying the mortgage, the lender won't care that she doesn't live there anymore - it will just want its money, either from you or from her.

If neither of you want to sell, then so longer as somebody is paying the mortgage you won't have to. However, as you say the lender won't agree to her name coming off the mortgage unless you come up with a way to reduce the loan to only £100k (and you'd have to do that without borrowing any more money, or the £100k maximum loan figure would go down).

Is there any possibility your ex could stay in the house, and your name could come of the mortgage? Does she earn more than you do?

Renting it out might be an option, but then becoming a landlord is effectively starting up a new business with your ex-partner - and there are a zillion ways that could go wrong.

Have you had an estate agent round to give you any indication of how much they think it might sell for?

grogdog

VIGILANT22 wrote: »

Dont even think about it!
By the looks of this namzij and the other post they targeted they're on here looking for vulnerable people........beware!

ummm interesting and i agree with you.