how do i remortgage to pay off co-owner?

robpaton

I currently live with my partner in our flat, which was bought 2 years ago. We are separating and I want to finance the separation, preferably without selling the flat. The mortgage is in my name only and I contributed £145,000 plus have been paying all mortgage and all bills except water and half council tax. My partner contributed 35,ooo, though this is legally a gift with no claim on property (as required by terms of mortgage). The current mortgage is for £50,000 and the property has now been valued at 375,000 an increase elf 150,000 on when purchased (London madness). I am self-employed and my income is low and very erratic after a change in career, but am in possession of a flat with 325,000 equity in it. Is a mortgage lender likely to loan me against the equity in the flat? If they question my income, would they possibly be satisfied if I could provide a guarantor?
What would be regarded as fair and final settlement? There are no children involved, nor any legal agreements between us barring the declaration of gift mentioned above.

Foxy-Stoat_3

I think this is a conversation you should have with your partner really.

What was the exit strategy when you bought the flat?

Mortgage payments aside, you put in 64% of the purchase price and your partner put 16% of the purchase price.

All being fair and reasonable, pay her £35,000 plus 16% of the increased equity, £24,000 totaling £59,000.

How you would finance this being on low income even with a low LTV would be another matter.

TrickyDicky101

Presumably the house is solely in your name?

If you have erratic and low income then I think you will have difficulty borrowing through normal channels.

Are you proposing to pay your partner back the £35k which was a 'gift' (and attested to as such to secure the mortgage) and are asking whether you should additionally pay back any increase in value?

I think this is more of a moral question than a legal one as all the recent documentation is on your side.

Jhoney_2

Wow this is complicated.

Not sure 59k is fair if she was living there for free - not withstanding the price of her half of C.Tax and the water bill. I would think there should be a deduction for a fair rent equivalent or half the mtg and bills for the 2yrs.

It would also be unfair to give partner nothing if that 35k was relied upon for the purchase or intended as the accepted contribution to a shared goal. That's just as bad.

All the best

Thrugelmir

Resign yourself to selling the property.