Breaking up, what happens now?

cunners

Hi all,

I just bought a house with my then girlfriend. We moved in last month and now we are breaking up. I know, crazy. I'm really worried about the house and mortgage. I do want to keep it if at all possible. I can afford the payments but I'll have very little diposable income left so I will likely get a lodger if the bank let me keep the mortgage on my own. I'm hoping the extra income from a lodger will push me into being accepted to keep it.

My question is what if they dont let me have it on my own, what are my options? My dad can lend me upto 15k to put down on the mortgage which might reduce it enough to get the bank to let me have it, but even then my ex wants her money back from the deposit she put down.

She says if neither of us can buy each other out then we will put it up for sale tomorrow and sell it asap. What are my rights here? I don't want to sell it for less than market value as I dont want to lose everything. She said she'll go to the solicitors if I drag my heels. What will happen in these circumstances? Will they say the only fair thing is to sell it for the price its worth?

Worried just doesnt come close to how Im feeling.

surreybased

Hi,

Firstly, are you sure this will be permanent - could they be a chance you will reconcile?

What happens next does depend on the finances. Could you afford to get a mortgage on your own? Would you meet the affordability criteria? If neither or you can get a mortgage on your own then selling is the most likely route but you will both lose money at a minimum the costs associated with buying will not be recovered.

In the heat of a break-up people tend to get angry and talk about solicitors etc but in reality the best option is to find out what are all the options and find the best route forward.
Perhaps you could provide details on salary, mortgage amount, deposit, property value and someone here will advise as to whether or not a mortgage on your own is possible.

CloudCuckooLand

Assuming its held on a 'joint' basis, she (or you) can force the sale if need be.

If you have only just moved in, then selling now should get close to what you bought it for?

Shame to incur a second set of fees and costs so quickly.

Ring the lender and ask what single salary would be needed to support changing to a single basis. If you are nowhere near that figure, you will have to sell.

Better to sell in a controlled fashion, before Xmas and the quiet season comes along. Especially, if she might get fed up by November and try to sell rashly for less than you need.

Keep Dad's £15k for a new place of your own? Don't put it into this house/mortgage unless it is changed to your name alone - if the market really tanks you might never see it again, if kept in joint names.

cunners

Thanks for your replies. I don't think there is any chance of getting back together, I have tried to explain that house moves are stressfull etc etc but she is very adamant that she is unhappy and feels like she can't feel the same about me anymore.

The house completed on Sep 10th for £147,000. We had 10% deposit so the mortgage is £133k. I earn about £27000. I know that this is not enough for the mortgage on my own which is where my dads money comes in, and a lodger. It depends if they allow it. The early repayment charge is 5% of the mortgage at the moment, we are on a 5yr fixed and it reduces 1% each year. So that would mean 140,000 to remortgage. Plus she would want her share back, which I work out around 4 or 5k taking into account charges and this months house price fall.

If I cant do it and she does try and force a sale, surely we would both have to agree on a sale price when and if an offer comes in?? I know that probably the most sensible option is to sell it and move on, but I am worried about losing all the money I put into it and thats whats driving me to try and keep it.

haras_nosirrah

so you boughts at 147k and both put in 5% + costs?

equity = 14,700 to start with

you would lose £6650 in early repayment charges

you would lose 2,200 in selling fees

you would lose £1000 in solicitors costs

minus mortgage of 133000 = total equity of £4150

her share would be £2,075. If she makes you sell now.

You could offer her this sum above for her to come off the mortgage. You should be able to put it into your name alone with a bit of help from your dad. Which bank are you with.

Otherwise you will both lose all your deposit if you sell now. - this is of course assuming you get 147,000 for it. You may get less. some solicitors won't let a buyer proceed on a property that has been owned less than 6 months as mortgage companies don't like it - you may only be able to get a cash buyer initially.

macman

Did you purchase the property as joint tenants or tenants in common? If the former, then she cannot force you to put it on the market (though you may have little alternative if she stops contributing toward the mortgage and you can't cover the repayments yourself).

cunners

Thanks for your reply, all your calculations are correct, and yes when you put it like that I guess the amount is even less if we look at the worst case scenario of selling. But what she disputes is that if one of us buys each other out we would both lose less money and hence she would want more, I know she will say that.

The mortgage was taken through Natwest Intermediary Services. I wasnt keen on it myself but thats in the past now and cant change it.

Ive been on their site on the calculators and played around with the figures. I think if my dad can put say another 5% down on the mortgage to bring it to 85% LTV, then they are a lot more willing with their salary multiple and it becomes enough to have it alone as long as I have a second income of around 4k, ie a lodger or even a second job.

It is joint tennants. 50/50

getmore4less

cunners wrote: »

Thanks for your replies. I don't think there is any chance of getting back together, I have tried to explain that house moves are stressfull etc etc but she is very adamant that she is unhappy and feels like she can't feel the same about me anymore.

The house completed on Sep 10th for £147,000. We had 10% deposit so the mortgage is £133k. I earn about £27000. I know that this is not enough for the mortgage on my own which is where my dads money comes in, and a lodger. It depends if they allow it. The early repayment charge is 5% of the mortgage at the moment, we are on a 5yr fixed and it reduces 1% each year. So that would mean 140,000 to remortgage. Plus she would want her share back, which I work out around 4 or 5k taking into account charges and this months house price fall.

If I cant do it and she does try and force a sale, surely we would both have to agree on a sale price when and if an offer comes in?? I know that probably the most sensible option is to sell it and move on, but I am worried about losing all the money I put into it and thats whats driving me to try and keep it.

Market value is what the next porson wants to buy it at.

Purchase £147k where there costs to add on who paid those?

10% deposit was that 5% each £14,700k/£7350

£133k mortgage 5% ERC £6650.

Costs to sell say 2% estate agents £3k and £500 solicitors.

So around £10k total

sell £147k
mortgage £133
fees £10k

£4k left so to buy her out at current value you need to pay her £2k

If there are prices drops it might cost her money if you sell

Time for a chat!
there is no money in this place to be had by either of you if you sell

So the best option a buy out where you pay her nothing, which I think is generious if prices have fallen.

£27k income gives around £120k on 4* a 15 extra deposit will leave you needing £118k so going to need negotiating with the lender.

If prices are dropping you are going to be trapped with joint finances if you cant agee to sell at a loss and you can't take it over.

If you end up in this situation you have 2 choices agree that there is no equity and you take the place over on paper( get an agreement for this) you pay all the costs from now on.

If she won't agree then you have to go down the pretend its a BTL.

You work out a market rent and who ever lives in the house pays this into the pot, you get 1/2 each from the market rent but both still pay the 1/2 share of the mortgage, if you get a lodger then that money is yours effectifly reduces your share of the market rent.

This will probably end in tears when new partners come along.

getmore4less

macman wrote: »

Did you purchase the property as joint tenants or tenants in common? If the former, then she cannot force you to put it on the market (though you may have little alternative if she stops contributing toward the mortgage and you can't cover the repayments yourself).

So how do wifes force a sale in divorce situation where they have joint tenancy.

I though changing from joint tenants to tenants in common was an easy process.

macman

getmore4less wrote: »

So how do wifes force a sale in divorce situation where they have joint tenancy.

I though changing from joint tenants to tenants in common was an easy process.

I don't see how they can, if the other partner is able to continue to finance any mortgage themselves. The property is jointly and severally owned and the consent of both must be required for any sale.
Though of course a wife might have the right of occupation granted by a divorce court under any agreement for care of children of the marriage, or might be awarded the house (or a share of) as part of any financial settlement.
You can reregister it as tenants in common, but then both parties have to consent and agree the percentage split.

cunners

Sorry, what do you mean by take the place over with an agreement on paper?