Girlfriend and ex's house dilemma....

no1goldenchild

Kinda of a long story but will keep it as brief as possible, would be interested in peoples thoughts.

My girlfriend has recently split with her ex, they own a property together with a mortgage on it. It was bought 4yrs ago for £120,000, mtg then of £117,400 current balance around £114,000, both put equal amount of money towards the deposit, property has been valued by a couple of estate agents and is worth £115,000.

My girlfriend now wants to cut all ties with her ex and wants rid of the mortgage, through either selling the property or ex finding someone to replace her on the mtg (he cannot afford to take the mtg on by himself)

He has come up with a proposal, as they will get charged £3500 early repayment charge by the bank if they sell in the next 3yrs, he wants to wait until the property prices increase and they are out of the erc's. His idea is for her move out, he carries on paying the mtg with his income plus getting a friend of his in to lodge. But this will mean that she will remain on the mtg for another 3yrs, which she and i don't want her to do as we hope to buy a place in the near future.

If the ex sticks his heels in and refuses to sell the property, is there any way that he can be forced to sell?

What would be the implications if she were to move out, remain on the mtg and wait until the 3yrs is up then sell, at this point the property hopefully would have increased and erc would be nil?

Does anyone have any thoughts as to the best course of action for her?

Sorry for the long post.

Emmzi

you can force a sale but you're going to eat up a lot of cash in solicitors fees and it will take ages, so not worth it IMHO.

I can see the guy's point tbh, £3500 is a lot of cash, plus EA fees etc when there is damn all equity in the place.

Does she want any cash out of it or just to be free?

What is stopping her from buying him out, or you moving in as the lodger and doing it the other way round?

Jowo_2

Yes, she can take him to court.

There's no guarantee that he will see a price rise in the property or be in a position to take on the mortgage by himself in 3 years time. How much does he earn?

Assuming he gets the mortgage down to about 100k, he'd need to earn 25k to take it on in his sole name. Meanwhile she is completely stuck from a borrowing point of view for 3 years when he can easily just renege on his promise.

http://england.shelter.org.uk/get_advice/families_and_relationships/relationship_breakdown/options_for_homeowners

no1goldenchild

shes prepared to cover the cost of the fees etc, she just wants rid. I have a mortgage on my own property, she doesn't earn enough to take the mtg on herself.

I was thinking about the possibility of adding my name to her mtg and rent the property out until the erc's expire, but not sure what the lender would say about their security being let out....

no1goldenchild

don't think that he earns anywhere near that amount, could be wrong though.

i was thinking exactly the same about the house prices etc in 3yrs time, thanks for the link

Emmzi

the problem with making it buy to let or even remortgaging is that there is no equity so restructuring the borrowing will be damn near impossible.

So unless you are prepared to pay a lot to get rid, it's lodger, they both move out and rent it with consent to let and run it as a joint business, she moves back in and gets the lodger, ...

no easy answer.

As the new partner/ I'd let he go talk to the bank herself and not get involved, too many possible arguements! Supportive nodding and smiling...

Jowo_2

Perhaps mediation is better rather than going through the last resort of a potentially expensive and stressful court process.

Can she bribe him to sell by offering to pay the fees or take the greater hit on the potential loss of equity, for example?

Perhaps better to pay him rather than a solicitor? Can she persuade him that though he didn't make any money on the property, he isn't exposed to (any or much) loss and got the use of the property as a home for 4/5 years?

If, for example, there's no hope of him earning 25k in the near future and actually more chance that he'd lose his job, she's better off writing off some money now than huge legal fees, and perhaps an even greater loss of equity in the future if house prices get softer.

How realistic is that valuation anyway? Have you actually researched sold prices in the area? Seems they bought at the peak of the market and for some reason, think they only lost about 4% of the value of the property which could be a bit optimistic. As it's a buyers market, there could be some rather keen and low offers.

Plans_all_plans

no1goldenchild wrote: »

shes prepared to cover the cost of the fees etc, she just wants rid. I have a mortgage on my own property, she doesn't earn enough to take the mtg on herself.

I was thinking about the possibility of adding my name to her mtg and rent the property out until the erc's expire, but not sure what the lender would say about their security being let out....

I think this is a SERIOUSLY bad idea. This is a new relationship for both of you and you are already thinking of linking yourself financially to her? It could be a catastrophic move for you.

diable

£3500 isn't a large amount of money, better to get out now as if the ex partner defaults then the liability is on your GF.

Jowo_2

diable wrote: »

£3500 isn't a large amount of money, better to get out now as if the ex partner defaults then the liability is on your GF.

But then there's also the legal fees, estate agent commission and negative equity if it doesn't reach the alleged valuation.

This could double, treble or quadruple that sum.

Still might be better to grin and bear a 5, 10, 15k loss than wait 3 years and be in either the same or worse position.

Chances are, though, that the ex would cling on to the optimistic scenario that they can afford to buy them out in 3 years time and would sabotage the sale. He's emotionally attached to the house, can't face losing his home and won't yield to logic which says if he's a lodger somewhere else, chances are he could save more in 3 years towards his next place than just remaining passively in a place that he can't afford on his own.

This forum is full of posts by buyers who find their warring joint sellers have spoiled their attempt to buy their property.

Does anyone know how much a court order to force a sale can cost and how long this takes?

diable

If he goes bankrupt then she is left with the whole debt.