confused about buying ex out of mortgage.

ladymarm

Having a difficult time and would appreciate advice- i will seek legal advice in next few weeks but playing on my mind tonight.

Am splitting from partner. We have one child. I would like and he would like for me to change our joint mortgage to one in my name only. Then our child has some continuity and he can afford to rent elsewhere.

Situation is; House worth approx £150-160k , mortgage outstanding is £95k, 22 years left, coming to the end of a 3 year fix in Dec this year. I paid a deposit of £50k when we bought and protected it with a declaration of trust (we are not married).

Mortgage company will allow me to take on a £95k mortgage on my part time £22k salary.

I don't understand how to value the house though? Mortgage compant told me for the purpose of remortgage their computer estimates it's worth £144k and local estate agent estimated £160k (he obviously wanted me to sell with him though so take with a pinch of salt). How do i get a realistic quote of value of house?

Also if we have paid £6k of loan (we borrowed £101k 3 years ago) do i have to pay back half of this to my ex or as he lived in the house for 3 years do i not?
Confused, thanks!

getmore4less

if you look at the total cost of purchase( who paid the purchase costs?) and the expected proceeds from a sale(after costs) is suspect there is less then the £6k off the mortgage so are marginal on equity(+ or -).

What are the sale prices of close equivilents that will give you a better idea than the mortgage valuation or the EA.

What does the OH think? that will be key to an agreement

If you can agree a clean break with you taking over the mortgage I think you will be close depending on the detail.

Was the 50k protected as a fixed amount(wrong) or a % of value(correct).
Was the mortgage paid equaly?

ALIBOBSY

TBH anything paid off the loan so far is pretty much at least the same as if not less than your partner would have paid in rent so I wouldn't include that in any calculations. Just look at the total outstanding.

Given you paid the deposit and the outstanding he surely wouldn't be due anything.But the fact that you have a child together and so need to at least be civil and pull together for them the best and fairest thing would probably be for you to take over the mortgage and pay him enough to cover a deposit on somewhere else to live.
You will then need to discuss arrangements for child support and access.

TBH if you can come to arrangements and agreements between the 2 of you and keep things civil for the sake of your child that is worth much more than money.

Good Luck
Ali x

ladymarm

My parents helped us with purchase costs! I have no proof of this however.

The £50k was protected as fixed. Not as percentage of house value. Funny i did think that at the time but actually it wont make much difference with market conditions but point taken!

I think OH thinks he will make a few thousand as he keeps saying about improvements we have made eg new boiler and upgraded bathroom but I personally think that the fairly flat market round here probably negates those small improvements. i don't want him to go away with nothing but equally we are trying to secure a future home for our child and i will be the one to pay for that ultimately give or take a couple of hundred pounds maintenance a month.

ladymarm

PS Mortgage paid equally for duration of 3 year mortgage every month without fail.

getmore4less

How were the improvements paid did the OH put in the work?

Do you have any cash to pay him off?

Some estimates

selling costs say £3k, Estate agents 1.5% + legals

so £3k + £50k + £95k breakeven £147k, max value £160k so £13k equity.

Unless £160k is priced to sell I think you will be lucky to see £150k

get a couple more valuations for a realistic sale

Also do some of your own research of similar local sales.

Personaly I think it is important to try to draw a line under as much of the finances as possible to keep whats left(kids stuff) as clean as possible.

If the mind set is there has been investment and £6k off the mortgage I am due a share, that needs changing to whats the place worth on the market.

themull1

If you do a transfer of equity, the bank whose mortgage it is do their own valuation, all Nationwide did when i did a transfer was go on the computer, and valued the house via a website that they use, worked out better for me cos it was less that i thought, so less to pay ex to buy him out.!!

ladymarm

We paid for the new boiler equally, we paid for new flooring in the house and bathroom refit equally, work carried out by tradesmen. Partner is a trademan himself so has been good at putting up shelves a bit of painting but really mainly bought in work.

Nationwide house price calc suggests house is worth 155k. i think that sounds realistic but will get some EAs in. Just hope they dont over inflate price as they usually seem to and that will be awkward for me.

Yes I have savings (about a years pay saved)but i now work part time with a 12 month old baby and childcare costs so i really really want to hold onto a safety net of savings.

ladymarm

what is a transfer of equity? Do we literally decide amongst ourselves the value of the house or will the mortgage company take an interest in that? I guess they only care about the 95k we owe them?

When I come to remortgage (fix runs out) in Dec am i going to run into trouble approaching other lenders looking for a deal if i earn £22k and have a mortgage of £95k.

getmore4less

The transfer is getting the mortgage and property into your name only, the mortgage company will only be interested in the mortgage unless you are taking on other debt to pay off the ex.

New lender might(will) be an issue,, what is the followon rate on the current deal? you might not need to change anything.

Ex needs to get it into his head it is market value, the work done appears to be equal so there is no leverage there to claim a bit extra.

I think I would make it clear to the Estate agents you need to sell so want realistic valuations, market at, expect to get, very quick sale.

ladymarm

Thank you, i worried that might be the case with remortgage.
if I have £20k savings will they look more favourably upon me as sole mortgagee?

Current fix is 4.78% and SVR currently 4.24 with Santander. They have a 2 year fix at less than 4% they told me. cant remember exact rate so not too bad. Should i stay with them rather than getting lots of duff credit checks then?!