Buying Ex out of House

flowerpots

Possibly looking to buy my husband (soon to be ex) out of his share of the equity in family home. Does anyone here have any knowledge of how you go about this. The money to do this would be coming from family. My concern is Morgage Company as technically I do not earn enough money to have morgage in my sole name. I work 30 hours & receive tax credits and I can def afford the repayments but understand morgage companies do not recognize tax credits. There would be over 50% equity in the property. Im not 2 sure how ex would feel if I bought him out but was unable to remove his name from morgage. Any advice greatly appreciated.

Dave_Ham

Firstly do you have any kids?

I ask this as some lenders will allow any maintenance payments as part of your income..

What is your income and what mortgage value do you need to buy out soon to be ex?

Loan to value works in your favour, but cannot mitigate a huge shortfall in income...

flowerpots

Hi Dave, earn 17.5K and maint will be aprox 2K so only 19.5K. Would assume I would be maxed out at 60K & morgage is currently 100K. Massive shortfall I know. I have 1 child & receive child tax credits (extra because in receipt of low rate dla for him) small amount of working tax credit, child benefit & child dla. I have no other debt and an excellent credit history. I am currently paying the morgage and all other household bills without any problems. Am quite certain I would never be able to re-morgage but happy to stay put with current lender. Would they take his name of the morgage ? My gut instinct is saying no although I am as well of as someone earning over 30K.

Dave_Ham

Depending upon your age, I think you could squeeze to £100k although I cannot believe your Ex would walk way at just the mortgage balance paid unless it was court enforced...?

Dave_Ham

Oh and did not understand the £30k bit at the end...

flowerpots

Hi Dave. thanks so much for your response. Basically I have over 2K per month coming in which is more than someone would take home on a 30K salary so I can well afford to pay morgage and have been doing so now for over 6 months. Divorce proceedings are just kicking of so anything decided with be subject to court agreement. Im in my early forties & morgage currently has 22 year's to run. Morgage is coming to the end of its fixed rate soon & current lender has option of another fix at 4.09% for 3 year's (no arrangement fee) & this is same rate as current morgage. Slightly cheaper to fix for 2 years and again slightly cheaper for a tracker.

Dave_Ham

Lenders will allow some income and not other types..

You should be able to get to £100k mortgage, although depends on how the court with view the equity and your ex's share of that.

Tight, but achievable...

flowerpots

and no ex would not walk away without any equity but depending on how much my parrents would be preparred to buy him out for me.

Dave_Ham

With their help the whole situation is do-able..

I would think you can take on the mortgage at the current levels (and probably a better rate) although not sure who the current lender is?

I wish you well....

flowerpots

Thanks Dave at least I know its possible. Lender is Yorkshire Building Society. Existing Customers do not pay arrangement fees but rates slightly higher I guess to compensate. 4.09% for 3 Year Fix 3.89% for 2 Year's and 3.59% for 2 Year Tracker. Looked at the rates in paper today & couldnt really see that much better taking into account the lack of arrangement fee. I think Yorkshire will include maint payments but not the credits although if Im already in the house etc ? I guess I will find out when I ask the question. Again many thx.

Dave_Ham

YBS have been hard work lately - do check you fit criteria first and most will not accept tax credits but some stretch income more than others...