relationship break up - House - how to split

hoops1980

Hi Folks,

I'm hoping to get a bit of advice re a relationship split and mortgage...

This is all at the early stages, but I just want an idea of where to go next..

I've been in a relationship for 4.5 years. My partner and I (not married) bought a house last year - for 99k - we spent 6 months and roughly 12k doing the place up and have now jointly decided to split.

we paid 99k - spent 12k - had/have an 85% mortgage on the property. and we do/ have split everything 50/50 and thakfully are both still really friendly about all this.

I'm now self employed and money is quite tight, but I reckon I could afford mortgage payments - I'm keen to buy partner out and at the moment she is happy for me to do that.. The house is now as an estimate valued at around 115k..

I'm looking to get a rough idea of how much I would have to pay her to buy her out... anyone got an idea?

Thanks so much in advance

Hoops

flossy_splodge

Thats easy. Assuming no offspring then as you paid 50/50 you just split the current market value 50/50 ie £57500 to her.
BUT, don't forget to check with your mortgage lender as they may NOT be happy for you to take on all the mortgage, especially in the light of the current financial mess having arisen in large part from people taking on debt they in fact CANNOT afford and the banks and building societies condoning it.
It's nice to hear of an amicable split. Well done, not that easy.
Good luck.

hoops1980

Thanks for the super quick response Flossy - much appreciated.

That is more or less what I thought - thanks so much for the advice - I'm going to arrange a meeting with the mortgage people for a couple of weeks - it's just nice to go into a meeting with an idea of how things should/might workout.

It's certainly nice to still be friendly about all this too - thankfully it's not down to a third person or anything - it's just us not working, so it's probably made things easier in that sense.

Thanks again

flossy_splodge

Best of luck. xx

getmore4less

If everything has been 50:50 or close enough to agree that then

1/2 the value less 1/2 the mortgage is the starting point.

If you sold you would be looking at around £2000 in costs(if you negotiated a good deal with an EA)

I think I would take off 1/2 that and as a guesture pay the costs to do the transfer.

So you need to borrow the existing mortgage+the payout-savings.

So roughly £115k/2 - £85k/2 -£1k = £14k

So you need a mortgage off £99k - savings.

Will the lender go for this?

[Deleted User]

flossy_splodge wrote: »

Thats easy. Assuming no offspring then as you paid 50/50 you just split the current market value 50/50 ie £57500 to her.

That's wrong she is not owed £57500 if the house is morgaged, just half the equity, so more like £14000. However in current market conditions with most property selling for 10% less than the asking price, you have room for negotiation.

martini_singer

hi, i'm in a similar position - bought a house with my partner 3 1/2 years ago, we have split up (amicably) and I want to buy him out of the house, but because I am self employed/mixed income and FSA have banned self certification can't get a mortgage, even though I earn enough money and have never missed a payment. I've spoken to an independant financial adviser and the bank. The independant adviser said that I wouldn't be able to raise a new mortgage but might be able to keep the existing mortgage and transfer his part of it to someone else. The bank (Halifax) have told me this morning that to make any changes to the mortgage (even if I keep the same rate/terms etc.) I need to go through a credit check.

Difficult situation. If you find out anything else let me know!

flossy_splodge

Deleted_User wrote: »

That's wrong she is not owed £57500 if the house is morgaged, just half the equity, so more like £14000. However in current market conditions with most property selling for 10% less than the asking price, you have room for negotiation.

I did actually assume the OP would recognise that from the proceeds of the sale they would have to deal with the mortgage! Sort of self evident really.:rotfl:

hoops1980

Thanks folks for all the advice - Flossy you're right I did assume what you've just said - but thanks to everyone for their suggestions.

It's really helpful.

Dear Martini, If I find out anything that may be of use to you I'll certainly let you know.

Cheers

Jules