Joint Mortgage & Separation from Partner

RAS

The above info from chopper is wrong.

If you negoitiate personally and can agree something that gives you some recompense for your additional input, that will be a lot better than encouraging your ex to go to a lawyer in response to a letter from your lawyer; as her lawyer will tell her she has not obligation to recompense you for the additional costs, just a straight 50% split.

Actually, she has no obligation to agree any split at all if she wants to be awkward.

TBagpuss

If you didn't have a declaration of trust at the time you bought the house, then strictly, your ex will be entitled to 50% of the net equity.

You can reasonably take into account notional costs of sale (i.e. what you would be paying in estate agesnts and legal fees if the house were sold)

so:

House is worth £240,000
less - notianl costs of sale at 3% £ 7,200
less mortgage £120,000
Net equity therefore £112,800
50% of this is £56,400 so to buy her out, you would need to be able to get her name off the mortgage and to pay her £56,400.

If she agrees that she 'owes' you £25,000 for the deposit etc. then you could knock that off the £56,400 so would need to pay her £31,400.

You will need to get a solicitor to deal with the transfer of equity and as on the face of it she will be getting less than market value for her interest in the house, you need to to make sure that there is a clear agreement drawn up making it clear that the payment is in full settlement of any claims she has in relation to the house.

You will need the consent of your mortgage lender to remove her name from the mortgage, and depending on your lender and mortgage, they may treat this as a remortgage and charge application fees and ERP (if applicable) Some lenders will not impose the ERP even though you will technically be re-mortgaging.

Obviously there would be nothing to stop you and and your ex agreeing on different figures, but on the face of it, she would be entitled to 50% of the equity.

JazzManJohn

RAS wrote: »

OP - if you do not have the paperwork to hand you need to download the deeds from the Land Registry to find out (£3).

Cheers. I will dig it out tonight when I get home and get confirmation.

JazzManJohn

TBagpuss wrote: »

If you didn't have a declaration of trust at the time you bought the house, then strictly, your ex will be entitled to 50% of the net equity.

You can reasonably take into account notional costs of sale (i.e. what you would be paying in estate agesnts and legal fees if the house were sold)

so:

House is worth £240,000
less - notianl costs of sale at 3% £ 7,200
less mortgage £120,000
Net equity therefore £112,800
50% of this is £56,400 so to buy her out, you would need to be able to get her name off the mortgage and to pay her £56,400.

If she agrees that she 'owes' you £25,000 for the deposit etc. then you could knock that off the £56,400 so would need to pay her £31,400.

You will need to get a solicitor to deal with the transfer of equity and as on the face of it she will be getting less than market value for her interest in the house, you need to to make sure that there is a clear agreement drawn up making it clear that the payment is in full settlement of any claims she has in relation to the house.

You will need the consent of your mortgage lender to remove her name from the mortgage, and depending on your lender and mortgage, they may treat this as a remortgage and charge application fees and ERP (if applicable) Some lenders will not impose the ERP even though you will technically be re-mortgaging.

Obviously there would be nothing to stop you and and your ex agreeing on different figures, but on the face of it, she would be entitled to 50% of the equity.

Thanks mate. This is roughly what I thought. This is exactly the kind of info I needed to chew on. I will do more research and keep this updated as soon as I get more information.

RAS

You would knock the £25K of the main price not her share.

TBagpuss wrote: »

House is worth £240,000
less - notianl costs of sale at 3% £ 7,200
less mortgage £120,000
Net equity therefore £112,800
Minus £25K = 87800

Her half is 43,900

However if you want her to agree to the £25K coming off, I would not be inclined to push for the nominal sale cost as well.

So more like 47500.

Kynthia

RAS wrote: »

You would knock the £25K of the main price not her share.

I agree if £25k was the total cost of deposit and works. So off the top of my head the equity less the £25k is £88k, making her share £44k. However is the property the only asset being split. Were you together for a few years or much more than a decade? Did either of you make other financial sacrifices/contributions for each other and the relationship (I note you had no children together so I'm assuming neither of you curtailed their career or earning potential to look after any) or did you both build careers the same as if you'd been single? It's all down to negotiation as you weren't married, so what are you prepared to pay and what is she prepared to accept.

TBagpuss

RAS wrote: »

You would knock the £25K of the main price not her share.



However if you want her to agree to the £25K coming off, I would not be inclined to push for the nominal sale cost as well.

So more like 47500.

The original post said that she'owed £25K for the deposit..' I read that as that being her 'share' - i.e. that the total deposit and repairs had been £50K. If the total deposit was only £25K then yes, she would only 'owe' 50% of that.

Richard_Webster

You will need the consent of your mortgage lender to remove her name from the mortgage,

At last, someone mentioned the point.

None of this is going anywhere if you can't get their consent. If your sole income is not enough to support the mortgage on their present criteria they may well refuse to agree.

Also she must agree. You tell her that she will want the freedom to buy another property (with someone else(?)) and she will not want to be jointly responsible in the future if you default on the mortgage so she should want out won't she?

Some people simply won't negotiate because they don't understand or they don't want to do so, but nothing is going anywhere if she won't sign the documents to do the transfer.