buying partner out of mortgage?

adibranch

Hi all,

Due to split up soon with my partner (amicable and friendly, for now anyway ) I'm pretty clueless about mortgages and how they are worked out. Our mortgage has the following details:

142K original house price
She owns 68% of the house, having put 52K in as a deposit (i put little if anything).
£82k left to pay.
House price now currently around 142-150K, not entirely sure yet.
The solicitor has worked out she gets 62k back in the event of a sale.
I currently only have 7k savings.

Now, i want to keep the house shen she moves out. I'm fairly certain i can afford the repayments , and i'm self employed with reasonable accounts. BUT, the bank says i cant just add the 62K on to the existing mortgage, remove her name from it, and carry on paying the increased repayments myself due to the fact that they'll only remortgage 85% of the value.

So, my question is.. is there any way i can keep the house? ASsukming i can afford the repayments and a lender will give me the money, how can i do it? Does the house have to be sold?

Thanks for any advice.. and if you need more details, ask away

Thrugelmir

On the basis that your partner is expecting £62k of the sale proceeds. Then there is no possibility of you retaining the house on the basis of the figures quoted.

When the property is sold , would appear that you come away with very little in fact.

RedFraggle

It sounds like there isn't enough equity for you to be able to pay your ex off and keep the house. Would she be prepared to leave her money (or enough of it for you to be able to remortgage) in the house as an investment? It isn't a great time to sell and there is the potential that this would improve within 5 years and you would both benefit. If you are still on good terms and she doesn't need the money it may be worth discussing this with her.

adibranch

unfortunately she needs the money for a new house, so i think thats out. Looks like we'll both have to move out. I really was under the impression (or hope) that i could just remortage, give her the 62k, and carry on. Unfortunately, due to the LTV issue, this wont be possible unless i can find about 20k from somewhere?

Its also a double whammy for me, as although i can afford up to about £750 mortage repayment a month, by the time were finished i wont have any money for a deposit, which means i'll be able to borrow next to nothing A high LTV or a part share may be my only option.

Wh05apk

The only other route would be for your to remortgage with another lender who will go above 85%, or raise the difference between 85% and the amount you need yourself.

A word of caution re the values, what value are you working on, lenders/valuers tend to be harsh, if you are assuming £150k, they may only agree £140k, meaning they would then only do 85% of that, giving you only £119k.

How have you worked out she gets £62k back? that means her intial "investment" of £52k, has grown by nearly 20%, yet the house price has changed little, something seems wrong here? as even if you sold for £150k, after fees etc, less the mortgage, there would only be about £62k equity in total.

adibranch

i've seen lenders that go over 85%, but the problem is then that the interest rates seem very high. This would push the repayments way past £750 per month, unless i went for interest only, which i dont know would be a good move or not (albeit even if i only did it for a couple of years or so).
Looking at some calculators though, on a 95% LTV and interest of 6%, repayments will be around £850 on a 30 year mortage (i'm 40, can i get a 30 year?), which is something to think about. Interest only is £710 on a 25 or 30, which is manageable.

Not too hot on the details as to why she gets 62k. The solicitors worked it out quickly for her based on a 150k sale, and when i saw the mortgage advisor , he also said 62k was right, but i think this was before fees etc were taken out.

I really want to stay in this propertly if i can. We've put a lot of work and money into it, and it will be familiar to our little lad. I think i can afford the repayments providing the lenders give me the money (i'm self employed, and whilst the business doesnt turn over megabucks, its been going a long time, the accounts are stable and have been increasing steadily over the past three or four years). I have no personal debts.

Really appreciate any advice.