Buying an ex partner out of a Mortgage

Rumbles

Hi all,

This is quite a complicated situation, so this might take a while to explain, after writing this I realised it's really long, so I have underlined the main queries below to make the questions stand out from the statements. I have been searching for answers on this issue, but since it's is quite particular the best advice I have seen so far would be to consult a solicitor, which will be the next step if an amicable agreement cannot be found.

So this relates to my g/f who has a mortgage on her property, which she started with her ex 3 1/2 years ago. At the time they put in an equal share of the deposit and paid an equal share of the mortgage. After 6 months they parted ways and he moved out, and stopped paying anything towards the mortgage, my g/f paid all of the mortgage payments. On the last month of that first year, he started to contribute the overpayment allowed on the mortgage every month, and has done every month since (it's less than a quarter of what she has been paying every month). I've put all of the payments in to a spreadsheet for the length of the mortgage to get a full picture on how much each has paid, and to try and figure out how much should be paid back to him.

Ideally, my g/f would like to stay in the house, we have done a lot of decorating in the year since I have moved in and have plans for further improvements. Unfortunately when they moved in together no arrangement was made as to what would happen in this situation.

So from the math I did, I got the following:

Just taking in to account how much has been paid on regular payments by each since the start of the mortgage, she is on 85.15% and he is on 14.85%. (So 100% is the total amount paid in the monthly instalments so far, ignoring the deposit)
If you include the deposit paid at the start, she has paid 63.72% and he has paid 36.28%.
If you consider the remaining value of the mortgage as well, her share is 24.55%, his share 13.97% and there is 61.48% left on the mortgage (when you consider what each has paid in total, including the deposit, and what is left to pay).

Now the value of the house has increased since they purchased it, and he is asking about getting his money back out of the property. I want to know how best to figure out what to pay him. I figured you take the new value of the house, minus off the remainder on the mortgage and then split the remainder. Since my ex has put in more, I think it's fair to do a proportional split (of everything paid including the deposits) between the 2, if you do an equal split she would get back £4k less than she has paid in and he would be up over £10k.

His father is an expert in these matters, which is why (we believe) he knew to start paying towards the mortgage after they separated. But this also means he has an expert behind him telling him what to say and do (potentially). I am good with math, but not an expert in these matters, so I thought I would ask what the internet thought

Now, the other issue is, if she were to take out a new mortgage at 5.5x her salary (she has been told this is possible) she wouldn't have enough to pay back her ex and the old mortgage. Can he force her to sell the house against her will? Is this only possible if he went through the courts? If so, how long would that be likely to take?

Thanks for any help, I am quite inexperienced in these matters, so if I have missed anything important and glaringly obvious, please don't worry about pointing it out.

jellyfish76

If the maths is correct then I'd say the way you are calculating the profit sounds fair (i.e. that he is getting a pro rate share of profits).

Whether your gf can get a mortgage will depend on her income and the LTV so it's probably best to talk that through with a broker. It is likely that her ex will want a proper valuation done in order to agree a price for the property.

Her ex could take her to court to force a sale but that would be probably a last resort for him - the legals costs would not make it favourable option if he is looking to gain maximum profits.

Sounds like both parties need to sit down and talk through the options.

(There are plenty of previous posts about buying out a partners share so it might be worth doing a search for some of those)

Thrugelmir

Lets's start by picking the bones out

1. 5.5x mortgage may be difficult to obtain.
2. A forced sale is always a possibility even in the future. All costs may well be borne by the loser i.e. awarded by the judge to the plaintiff. So not an option unless there's a justifiable defence. Which there isn't.
3. A fair split of the equity after deducting the initial deposit made by each party is a sensible compromise to achieve.

Meet on neutral ground and thrash out a compromise. First check out the mortgage options.

TBagpuss

When you look at what each of them has contributed, you also need to factor in the fact that your g/f has had the benefit of living in the property since the two of them separated.So while she may have paid more, some of that was effectively 'rent' for the property.

It may be fairer to look at the proportion each of them has paid off the capital, rather than the total they have each paid.

Alternatively, if you look at the total each has paid then it may be reasonable to agree a figure for 'occupation rent' for the period that she (or you and she) have been loving there and her ex has not. Presumably he has been paying rent elsewhere during the separation?

If they cannot reach agreement about the split, or if she cannot afford to buy him out, then yes, he could force a sale.

Would it be possible for you and your g/f to get a mortgage jointly, and for you to buy into the property, if she cannot afford to buy her ex out?

Rumbles

Thanks for the speedy responses, I appreciate the input, but can you clarify what you mean when you say:

It may be fairer to look at the proportion each of them has paid off the capital, rather than the total they have each paid.

TBagpuss, how do you define the capital in this situation? Also, when you state:

When you look at what each of them has contributed, you also need to factor in the fact that your g/f has had the benefit of living in the property since the two of them separated.So while she may have paid more, some of that was effectively 'rent' for the property.

Would the fact that she has been paying all the bills, council tax, upkeep an maintenance on the property not count against that? Also, his payments have been substantially less (less than half) than the interest each month, and around 1/5 of the amount she has been paying every month.

Sitting down with him will come shortly, I just wanted to help her have the best possible idea of where she stood, as we think he's going to be prepped by his father before the meeting.

Me going in to a joint mortgage with her is an option, but I have a much worse credit rating than her (but also earn a lot more) so we wouldn't be able to borrow as high a proportion, but probably more in total. However, it's probably a last choice if he isn't willing to wait until she can buy him out without me as it would be best for her to be on her own on the mortgage, rather than have another partner. If we do go ahead and do that I think we'll have a pre arranged agreement on equity share signed before we go in to it to avoid this mess if the same happens again.

Thanks again, you're helping us to get an idea of where she stands when she does speak with him further.

Annisele

So you're saying that even if she could get a 5.5x salary mortgage, she still wouldn't have enough money to pay off the ex? If that's the case, I don't see how she can afford to keep the house.

Do you know why the ex has suddenly decided he wants his money out now?

Does he want to buy a new house of his own, and wants his name off the existing mortgage? If that's the case, he's not going to be happy with any solution that doesn't involve him having no further liability - but he might be a bit more flexible about how much money he wants back.

On the other hand, he might not want a new mortgage at all - he might want to move in to the house he already owns. If he can afford to take the mortgage on himself, but if she can't, that might be the fairer option.