Buying Out my Partner - Unusual Question

stuartswift

Hi All

I am new to the forum but would lilke to pick your brains if I may.

My partner and I are separating and I am keen to take ouver the house. I have spoken to the bank and in theory, I earn enough to be able to take over the mortgage.

My question is around buying out... and whether I would have to give her anything. We have owned the house for approximately 6 years and paid equally into the mortgage for all of that time. Sadly, as we bought just before the market crashed, it seems that the value of the house has fallen rougly in line with the payments we have made. As such, based on the Halifax's valuation, we are currently at 101% LTV (Just about negative equity).

My understanding is that I would not have to pay my ex a penny to take over the mortgage, whereas her view is that as I will benefit in the future from the payments she has made in the past (if that makes sense), she wants all of the monthly payments she has made, back?

Who is right?

I look forward to hearing from you

Stuart

ChopperST

How is the house held? Are you tennants in common?

(Also is your username your real name?)

John1993_2

There is no hard-and-fast equation here that tels you what you ought to agree on, and people will differ on what is "fair". Fair to me would mean that if you both put the same in, then you will both own the same fraction of the equity in the home. As this is 0%, you both own half of nothing, and so you should not be paying her anything.

She seems to be confused over something that I see often, which is what the mortgage payments have been for. Tey were servicing the debt, against which you both got to live in a house that otherwise you would have een renting. She seems to feel that she shold have something for what she's paid in, but doesn;t see that she's had exactly that, a roof over her head, and her own place, for however many years you've both been there.

I don't know if it'll help, but try to explain it this way. You could explain that if you sold up, and bot hstared fresh, that she'd actually have to pay cash to close out the small negative equity.

She might counter that if this happened you'd have the expenses of applying for a new mortgage, buying a house etc. This is true, and so maybe, to avoid the expense, despite it not being "fair", you could offer her a thousand or two to walk away.

Tigsteroonie

How will you 'benefit from the payments she has made in the past', did she specify? After all, you still have the same amount of debt at this point as you did when taking out the mortgage.

You were living as a couple. You both paid mortgage instead of rent. You both lived there. I would say that you both benefited equally.

I'm presuming you're not married, else this would all become more complicated

Prothet_of_Doom

Apply the following logic.

Imagine You are jointly selling the house to a third party. After taking into acount selling fees, and solicitors fees, there is say £2.51 left, so you spilt the £2.51, £1.25 each.

But if the value of the house is worth less than what you jointly owe, you'd have to pay the building society the amount you owe. Which in this case is about £100 to £300.

So it just so happens that in this case, you are the buyer, and you are doing your partner a £50 to £150 favour by taking it over.

Offer her the choice. Sell her half to you and move on, or wait until you both find a buyer, and let her pay her share of the negative equity, plus estate agency fees, plus the mortgage whilst it's on the market. If she thinks she can get a better deal, and get more for her share then she has every right.
Or offer her the same deal as you are giving her. Be prepared to walk away if she decides to buy your share instead.

hieveryone

In a way, I can see what she is getting at.

Perhaps in her mind, she envisioned the house as an investment, something, that at some point in the future, would return her investment cash wise.

Therefore, with the loss of the investment (i.e her moving out), it will feel to her like she has therefore 'lost' all her money. Whereas you on the other hand, still own the house and will potentially benefit from the investment when the market gets better.

I can see it from both sides.

Would she accept a token payment from you as way of a compromise?

Brian8888

If she wants all the monthly payments for the mortgage back she should compensate you with a monthly rent payment for the time she was living in the house. Funny enough rents are usually higher than mortgage payments. So you can make a calculation with a rent estimation that comes out higher than her mortgage payments. Then you can offer her to just leave the mortgage payments in rather than even paying you more back.

antrobus

stuartswift wrote: »

...My understanding is that I would not have to pay my ex a penny to take over the mortgage, whereas her view is that as I will benefit in the future from the payments she has made in the past (if that makes sense), she wants all of the monthly payments she has made, back?

Who is right?...

Well you're right. Although actually, given that the property is in negative equity, she should really be paying you for the privilege of being released from that liability.

Tigsteroonie wrote: »

...I'm presuming you're not married, else this would all become more complicated

Things would simpler if they were married. If they married, there would be a divorce, and the matter would be going before a court, and a court would have no truck with a claim for the repayment of historical mortgage payments.

Other than that, I don't think that there's really much advice that can be given. The ex clearly has a completely wrongheaded idea of what's going on here, but beyond explaining to them that do have a completely wrongheaded idea, and suggesting that they get legal advice, I'm not sure what can be done.

mrginge

Think i'll put my house on the market and whoever buys it off me can refund all my mortgage payments too.

Tell her she's living in cloud cuckoo land.

jamesml

Lol at the above post.

She's talking out of her backside and trying to get as much as she can from you.

If neither of you took on the mortgage and you went down the sale route, she would need to fund the shortfall along with all the fees to do so. Set out how much this is likely to be, then explain to her that if you take on the mortgage from her she has no liability and doesn't pay anything (assuming that you are happy with that).

If she still doesn't want to play ball then tell her you will have to sell and she will have to pay her share of the the negative equity along with the fees. She has a fundamental misconception and you might have a fight trying to make her understand. I'm sure she would be expecting 50% of any equity on sale if it had any equity - except because its a loss she suddenly doesn't get it.

Thrugelmir

stuartswift wrote: »

Who is right?

No-one. Comes down to compromise. You will benefit from staying the house. So will she. Though you more so.

My question to you is how do you propose to remortgage if it's negative equity?