Splitting up with partner, getting my deposit back

g0009348

Hi, me and my girlfriend have split up and she wants to buy me out of the house. I have no problem with this as it means no estate agents involved. The problem is she hasnt got the cash so is looking inot getting a loan to cover my part. We put a 25% deposit down so was wondering if we could effectivley sell the house to her and she only put a 10% deposit down which frees up cash to give me back my share?

holly_hobby

She can't buy a house she already owns.

Quite apart from any personal agreement for her to "buy you out" and release you from the mge/prop deeds - your mge lender will only agree to this if your ex's income is sufficient to service the mge on her own.

Further to which, if she is looking to release equity to repay you, apart from her income obviously having to support this, the lenders max borrowing (LTV) will also come into play - and you may find that there simply isn't enough equity to remain within max borrowing limits, and release monies too.

If she isn't earning enough to at least service the current mge on her own, your mge lender won't be able to release you (until her income is sufficient). Which means (apart form no lump sum for you) that you shall also remain party to the mge and legally liable for its repayment.

If this is the case, you may find that having an appointment with a whole of market mortgage broker may be helpful, as they will be able to (possibly) source an alternative lender, whose income assessment (& max borrowing) may be more generous, to achieve what you wish. (either partlyi.e just release you from the mge liability, or entirely i.e release you & provide extra borrowing to address the "buy out" issue.

NB - if your ex can not, or does not wish to release equity to pay you - but intends to effect a loan instead, shall have to delcare this as part of her mge app. (as it is a material change that will have an impact on her on going mge affordability)

So first things first, ex needs to contact the existing mge lender to see what they are prepared, or not prepared to do, regarding your removal.

Hope this helps

Holly

g0009348

Thanks Hollie,

To give you more details.

we paid 170,000 with a 25% deposit and have 124,000 outstanding. Her wage is good so dont think she would have problem with getting a mortgage for her self.

Is it possible to remortgage to a single person and realease 15% equity which should cover my deposit?

Occams_Razor_2

of course she can buy the property she already owns, its called a re-mortgaging.

the only issue is whether she would qualify for financing based on her singular circumstance

CLAPTON

is the house still worth 170,000?

you want to get back 25,500 ?

so she needs a mortgage of 124,000 + 25,500 = 149,950

i.e. base on value of 170k then she will have a deposit of 12%

is her salary sufficient to get a mortgage of 149,500 and will the lenders ofer a 88% LTV mortgage?
you need to ask them

kazwookie

She need to reapply for a mortgage.

You need to get legal advise to ensure you are not liable for any outstanding monies

holly_hobby

Occam/s_Razor wrote: »

of course she can buy the property she already owns, its called a re-mortgaging.

the only issue is whether she would qualify for financing based on her singular circumstance

What ?

To clarify - a re-mortgage is not "the buying a property you already own".

A re-mortgage is a release of equity and/or change of lender, on a property already owned wholly or partly by the applicant.

Hope this helps clear things up

Holly

holly_hobby

g0009348 wrote: »

Thanks Hollie,

To give you more details.

we paid 170,000 with a 25% deposit and have 124,000 outstanding. Her wage is good so dont think she would have problem with getting a mortgage for her self.

Is it possible to remortgage to a single person and realease 15% equity which should cover my deposit?

All depends on what total borrowing reqd is, the value of the property on survey, and the lenders max ltv for either equity release (existing lender) or remortgage (chabnge of lender).

Have an initial chat with the existing lender to see where you are at with them and their available rates (if they are happy to lend at reqd levels).

Then, if you do need to remortgage (and income isn't a prob) to have a chat with a whole of mke broker, for guidance on who in the market has the best LTVs, rates etc..

Hope this helps

Holly