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Shared equity - separation - negative equity
gareth2931
Posts: 1 Newbie
Okay, this the situation.
My partner bought a house with her ex in 2008. It was bought on a shared equity type agreement where the mortgage covered 75% of the purchase price. No deposit was paid. The builders still own 25%.
They separated in 2009 and both moved out of the house, the house was rented out until September last year when after numerous problems with tenants it seemed the sensible thing to do for me and my partner to move in.
My partner and her ex are looking at selling the property. When the property is sold the price must be agreed by the builder and they must be paid their percentage 1st. This means that at best the house will break even but will more likely result in negative equity and money being owed to the mortgage company.
My consideration is whether there is any value in me and my partner taking the house on (or my partner on her own). Neither me or my partner have a particularly good credit history and having lived in rented accommodation and having 2 children we have little in the way of savings.
Would taking on this house be a reasonable way of getting on/ staying on the property ladder? If my partner's ex signed the house over to her would that mean that the builder would have to be paid? And my partner would need to obtain a new mortgage? Or continue on the current mortgage without her ex on it? And not pay the builder until the end of the 10 year term? Could she get a new mortgage and still not pay the builder?
If she could get a new mortgage in her own name on a preferential rate then there is a potential she could save £100 a month in mortgage payments. If we added to that the £200 we intend to save a month in the 3 years before the builders have to be paid we would save approx £10k. That could be used towards a deposit if/ when we moved. Or would we be better to overpay on the mortgage so there is more equity in the house at the end of 3 years?
Any advice from anyone who has found themselves in a similar position would be appreciated. Even if that help might be signpost us to someone who can assist.
Thanks
My partner bought a house with her ex in 2008. It was bought on a shared equity type agreement where the mortgage covered 75% of the purchase price. No deposit was paid. The builders still own 25%.
They separated in 2009 and both moved out of the house, the house was rented out until September last year when after numerous problems with tenants it seemed the sensible thing to do for me and my partner to move in.
My partner and her ex are looking at selling the property. When the property is sold the price must be agreed by the builder and they must be paid their percentage 1st. This means that at best the house will break even but will more likely result in negative equity and money being owed to the mortgage company.
My consideration is whether there is any value in me and my partner taking the house on (or my partner on her own). Neither me or my partner have a particularly good credit history and having lived in rented accommodation and having 2 children we have little in the way of savings.
Would taking on this house be a reasonable way of getting on/ staying on the property ladder? If my partner's ex signed the house over to her would that mean that the builder would have to be paid? And my partner would need to obtain a new mortgage? Or continue on the current mortgage without her ex on it? And not pay the builder until the end of the 10 year term? Could she get a new mortgage and still not pay the builder?
If she could get a new mortgage in her own name on a preferential rate then there is a potential she could save £100 a month in mortgage payments. If we added to that the £200 we intend to save a month in the 3 years before the builders have to be paid we would save approx £10k. That could be used towards a deposit if/ when we moved. Or would we be better to overpay on the mortgage so there is more equity in the house at the end of 3 years?
Any advice from anyone who has found themselves in a similar position would be appreciated. Even if that help might be signpost us to someone who can assist.
Thanks
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