Buying out partner - help pls

RS_Clio

Hi,

I'm after some advice please.

Looking to buy out ex-partner. We're Mortgage free and not married. Without going into amounts in detail. I think I need to find funding (new mortgage) to raise capital for:

Her initial deposit + her share of the mortgage per month times the number of payments made (off the capital, not including interest obviously) + half of any profit we've made. Is this right ?

I am now really worrying that it could be a case of having to split the house 50/50 even though the only reason we're Mortgage free is massive overpayments I made.

Thanks.

ACG

The thing is, you were a couple. I think you will find she is probably entitled to half.
I bought my house, i put down about 90% of the deposit, i pay probably 70% of the bills. But if we split up, bar the deposit we would split it all 50/50.

Your partner has presumably brought something else to the table - whether that be a house wife - cooking/cleaning/shopping etc or bringing up the kids or even working part time. You bought the house presumably as a couple and were a family.

RS_Clio

Thanks for the quick reply.

I see a little part of what you say, and I wanted to avoid figures, but I probably can't make my point as well without so:

I put in £70k deposit.
She put in £30k deposit.
So we had a joint mortgage of £110k.
I paid off £80k in overpayments from my money.

Both work full time, no kids. Household bills split 50/50.

I honestly am trying to see this from both our viewpoints but I don't see how that can be fair to go 50/50 when i've invested £70k+£80k+about £15k of repayments vs £30k+£25k of repayments.

Thanks.

ACG

I can see your point. Have you had the discussion with her?
You might be worrying about nothing.

newbie1980

RS_Clio wrote: »

Thanks for the quick reply.

I see a little part of what you say, and I wanted to avoid figures, but I probably can't make my point as well without so:

I put in £70k deposit.
She put in £30k deposit.
So we had a joint mortgage of £110k.
I paid off £80k in overpayments from my money.

Both work full time, no kids. Household bills split 50/50.

I honestly am trying to see this from both our viewpoints but I don't see how that can be fair to go 50/50 when i've invested £70k+£80k+about £15k of repayments vs £30k+£25k of repayments.

Thanks.

your only problem is unless you can 100% prove where funds where from you may have to settle 50/50
just hope for your sake you have proof

RS_Clio

ACG - have had the conversation, yes. Currently she is in rough agreement on my previous post. I'm more thinking ahead for if / when someone else may try and "advise" her to go for more - you never know etc.


Newbie1980 - 'proof of where funds came from' - as in the Deposit or the Overpayments ? Overpayments 100% nailed-on as it's from years of savings accounts that were solely in my name.

Thanks.

getmore4less

What agreement did you put in place when you started this joint venture?

You could do it the way you describe, money in == money out split the rest.

Or you could do it on you bought equity shares and split it that way.

how come the mortgage payments are so different?

RS_Clio

Foolishly nothing legal. Never saw this happening - you live and learn I suppose

Due to the way we split the deposits (£70k me / £30k her) we then split the monthly mortgage payments the other way, so roughly £210 per mth me / £480 per month her. Never intended to overpay it.

Then I got the Overpayment bug from this site and over 5 years put in my £80k to clear it right down.

Without the o/p's after 6 years between us we'd paid off about £23k off the capital, so her 2/3's of that is about £16k I guess.

My head hurts !?

getmore4less

Who paid the other £7k?

what original term on the mortgage, did you keep the normal payment the same even with the overpayments.

it won't be too hard to work out what you each put in.

It looks like there was an implied agreement to fund 50:50 initialy by splitting the mortgage.

By paying off the mortgage early you have effectively loaned the OH their share.

RS_Clio

I paid the £7k in my monthly mortgage payments (~£210 per/mth)

There was always a verbal agreement that if we split we would either:

1) Sell the house and from the sale money take back each of our deposits, plus half of any profit we'd made.

OR

2) One of us would buy the other out by raising capital for the OH's deposit back, plus profit (if any), plus what the other person had paid off the capital per month over the term.

Original mortgage term was 20 years and yes we kept the monthly payments the same even though I overpaid. We just kept reducing the term down.

I am not sure where this leaves me now....

getmore4less

I think you stick with the agreement

Anyting over £210k is split 50:50

You then needto work out how much of the £110 mortgage you each paid

you could model the payments in a spreadsheet

if you continued to each pay the same monthly till the mortgage was paid off a simple model it to just look at every overpayment and treat 1/2 of it s a loan to the other you then split the £110k as £55k each and the OH just pays back the loan. which will be £40k if all overpayments were by you and the OH never overpaid.

so you would be looking at 30+(55-0)+ 1/2 profit to buy out.

Your numbers don't add up, you said £23k in payment £16k hers £7k yours + £80k that leaves another £7k missing to make £110