Ex-partner buying me out!

frazzo

sorry in advance for the repetition of this common question but I think my calculations are quite simple - it's just my expectations aren't!

the property is currently rented out but there is a shortfall that we jointly make.

We have the option to extend the mortgage term from 20 years to 30 years which will drop the mortgage payments and the rent will then cover the mortgage.

£240k apartment.

Outstanding mortgage is £190k

It's worth £200k now (Nationwide says more but better to be conservative)

So we've both put £25k each including our deposits of £12k each.

Q. What is my bare minimum to walk away with? - lose My 12k deposit and take half of the "sale" profit, £5k?

andy.m_2

zero at best.
Fees and a cunning solicitor will easily swallow £10k remaining equity.

Sorry

Kynthia

Will the mortgage company allow you to walk away and will your partner be able to mortage the property on their own. Also will your partner be willing to pay you anything when they will now have to make up the full shortfall in rent and pay all the tax that you are declaring on the income?

frazzo

Well it was on offer from her family to help buy me out.

Her finances are in good order it's just what how much the mortgage lending criteria have tightened since the boom days.

It'll be important to keep the legal fees to a minimum. After all the bank will just assess her finances and solicitor needs to apply for a name change on the deeds. Can't charge that much can they!

Thankfully we are on very good terms. Even possible to keep it as it is and add a "tenancy in common" agreement 99% to 1% ownership or am I making that up!?

Debt_Free_Chick

frazzo wrote: »

sorry in advance for the repetition of this common question but I think my calculations are quite simple - it's just my expectations aren't!

the property is currently rented out but there is a shortfall that we jointly make.

We have the option to extend the mortgage term from 20 years to 30 years which will drop the mortgage payments and the rent will then cover the mortgage.

£240k apartment.

Outstanding mortgage is £190k

It's worth £200k now (Nationwide says more but better to be conservative)

So we've both put £25k each including our deposits of £12k each.

Q. What is my bare minimum to walk away with? - lose My 12k deposit and take half of the "sale" profit, £5k?

Using these figures .....

You "sell" (to your ex) for £200k. The mortgage is repaid (£190k) leaving £10k. You each have half of that, but you then need to deduct the fees from that.

At best, you'll get nothing.

At worst, she won't get a mortgage as there's no equity/deposit for her to put down.

frazzo

Debt_Free_Chick wrote: »

Using these figures .....

You "sell" (to your ex) for £200k. The mortgage is repaid (£190k) leaving £10k. You each have half of that, but you then need to deduct the fees from that.

At best, you'll get nothing.

At worst, she won't get a mortgage as there's no equity/deposit for her to put down.

no the equity in the property won't change. There will still be an LTV of at least 90% for her fresh application. (190owing/210worth)

Any money she pays me will be a private arrangement as soon as I'm off the deeds.

How can fees cost £10k for a change of deeds. I'm sure the bank wouldn't charge me more than £500.

Debt_Free_Chick

frazzo wrote: »

no the equity in the property won't change. There will still be an LTV of at least 90% for her fresh application. (190owing/210worth)

Any money she pays me will be a private arrangement as soon as I'm off the deeds.

How can fees cost £10k for a change of deeds. I'm sure the bank wouldn't charge me more than £500.

Assuming it's valued - for mortgage purposes - at £200k and assuming you can get away with fees of £500, then you'll get roughly just short of £5k.

But a mortgage valuation tends to be very conservative and less than what an Estate Agent suggests you market it for.

You won't know until you go through the process.

Yes - if ex's relatives are paying you £5k, then her mortgage requirements are less, but she will still need a 95% (re)mortgage.

I'm not suggesting that the legal fees will be £10k - but that the property valuation may not be as you envisage it. You won't know until you go through the process, but it's likely to be tight, so best to expect nothing at all!