how would my fiance buy me out of our mortgage?

hayhay1702

HELP!! me and my fianc! bought our first house together last year and we have now broken up, he has offered to buy me out, hes basically going to pay me a lump sum so I sign the house over to him completely and take my name of the mortgage. How would we go about doing this? and roughly how long will it take until its finalised and I have to move out of the house?? Thanks

jk0

I suggest you go back to the solicitor who handled the joint purchase, as they will already have all relevant papers.

G_M

1) get 3 estate agents round, say you are thinkingof selling, and ask for valuations. Note EAs tend to value high

a) to persuade you to use them,not the competition and
b) because they know the price they market at is not the price it will sell for

so press them also for a realistic sale price.

Compare the 3 valuations and agree a figure.

Assuming you have each contributed equally to the purchase, the mortgage payments, and repairs/improvements, then 50% of the agreed value is the price your ex pays you.

2) It is likely you'll need to pay off the existing mortgage, and your ex will need to take out a new one in his name. Will he qualify on his salary alone?

However, ask the existing lender if they will consider simply removing your name if you are also removed from the Deeds

3) Removing your name from the Deeds could be done simply/cheaply via the Land Registry, but any change to the mortgage will need a solicitor,so you might as well get them to do both jobs at once.

Dimey

Just saying - are you sure you want him to buy you out? Might you want to buy him out?

zzzLazyDaisy

G_M wrote: »

Assuming you have each contributed equally to the purchase, the mortgage payments, and repairs/improvements, then 50% of the agreed value is the price you pay your ex..

Assuming the house is in England or Wales (Scottish law is different) Where the property is held in joint names and the owners are not married and in the process of a divorce, the net equity must be split according to the legal title. So if the house is owned as joint tenants or tenant in common in equal shares the net equity must be divided 50/50. The issue of who paid what into the house is irrelevant in this situation because in English law the joint ownership is a trust with both owners being trustees for each other, and having joint and several liability.

hayhay1702

i cant afford to buy him out as i only work part time so wouldn't be able to afford the mortgage and bills alone either. we bought the house for £70,000 in august, we put down a 10% deposit of 7000 which we both put half the money in for. He has offered to buy me out at £5000. i thought this was pretty reasonable as we have each only put 3500 in really, the rest is the banks money. so i would be getting a profit of 1500 and he would be getting the debt of 63000. He is on a pretty good wage so i think the bank would approve him the mortgage. i just wondered how long it might take to go through? as im still living in the house and need to find somewhere else to live, pack my stuff etc. Thanks

G_M

zzzLazyDaisy wrote: »

Assuming the house is in England or Wales (Scottish law is different) Where the property is held in joint names and the owners are not married and in the process of a divorce, the net equity must be split according to the legal title. So if the house is owned as joint tenants or tenant in common in equal shares the net equity must be divided 50/50. The issue of who paid what into the house is irrelevant in this situation because in English law the joint ownership is a trust with both owners being trustees for each other, and having joint and several liability.

Thanks. Seems a valid point.

However, say one of them had paid for the extension to be built, or only one of them had made the monthly mortgage payments, (and, as you say, the house is owned as joint tenants or tenant in common in equal shares), could they not agree for this amount to be re-imbursed?

Perhaps as a payment seperate from the property Transfer itself?

And could the benefitting party (whichever had paid out the most) not refuse to buy/sell unless they were compensated?

As another thought, does not your point apply if the property is sold, and the proceeds are tobe split between them?

In the OP's case, one joint owner is buying out the other's half share. Surely they can agree whatever price they want for this?

zzzLazyDaisy

G_M wrote: »

In the OP's case, one joint owner is buying out the other's half share. Surely they can agree whatever price they want for this?

Yes, of course they can agree any price they want. In fact OP could simply walk away and agree to take nothing at all.

But I was just pointing out the legal position, as many people simply don't realise that legally the net equity in a jointly held property is 50/50 regardless of who has paid what


EDIT.... ignore this next bit... right advice, wrong thread!!!!
(although where there is a divorce, those shares can be adjusted by the court depending on the situation. So in OP's case, where there is a pension which OP is not seeking to claim against, she could get a larger share of the house because of the pension splitting laws on divorce, but OP has indicated that she doesn't want to go down that route).

Annisele

I'm not sure OP is actually married - she talks about a fiance, not a husband. If she isn't married, then the pension splitting rules don't help her.

zzzLazyDaisy

Annisele wrote: »

I'm not sure OP is actually married - she talks about a fiance, not a husband. If she isn't married, then the pension splitting rules don't help her.

Sorry, brain fog - I was also posting on another thread with a similar issue.

Sorry OP forget the comment about divorce and pensions, and just take the £5000!

Dx

00ec25

50/50 is only fair given that is how you share the ownership of the property and the original deposit

whether the £1,500 "profit" accurately reflects your share of the total of the capital you have paid off the mortgage since buying last year plus any increase in property value only you can say as you have the numbers. Eg the Land registry stats say last year the average increase was 0.8% (£5.6k so £2.8 for your share) but then again it depends on region as prices fell 3.8% in the "north east" http://www.landregistry.gov.uk/public/house-prices-and-sales

without knowing your location then £5k appears a reasonable offer as it gives you back your deposit plus some share of increase, but you may want to argue about a few £000 extra if you want