Joint mortgage (unmarried) and splitting up

amnblog

You have £36,500 of equity in there.


She need to raise £178,500 to pay you off.


Sounds tight on affordability.

dimbo61

Sorry forget what you have both paid so far ( treat that like rent over last 4 years)
What is property worth TODAY £xxx,xxx minus outstanding mortgage equals equity.
Divide that by Two so approx £36,500 minus costs to transfer into her name.
It does not matter if £142,000 is a mortgage of 25% of her take home pay at the current rate , what matters is can she find a lender who will give her a mortgage of £142,000 + £36,500

brutal_deluxe

amnblog wrote: »

You have £36,500 of equity in there.


She need to raise £178,500 to pay you off.


Sounds tight on affordability.

Sorry yes that sounds silly, I think I got my definitions mixed up!

Basically it goes like this:

She can afford to give me my part of the deposit back as a lump £26,500

What other amounts would I logically be entitled to if I were moving out, considering we've both paid in about 10 or 12k so far?

I'm not bothered about factors such as if the value of the property has increased.

Thanks

BD

brutal_deluxe

dimbo61 wrote: »

Sorry forget what you have both paid so far ( treat that like rent over last 4 years)
What is property worth TODAY £xxx,xxx minus outstanding mortgage equals equity.
Divide that by Two so approx £36,500 minus costs to transfer into her name.
It does not matter if £142,000 is a mortgage of 25% of her take home pay at the current rate , what matters is can she find a lender who will give her a mortgage of £142,000 + £36,500

Thanks, I read this late!

OK yes I was considering dismissing the last 4 years as rent. Happy to do that.

I think I understand now how the equity is calculated.

So say property value (215,000) - remaining mortgage (approx 142,000) = 73,000?

Divided by two = 36,500?

Sooo, this includes my initial part of the deposit (which is equity of course) at 26,500, which leaves approx £10,000?? What's this figure??

Sorry, I was never too good with the maths

BD

Humbert_Humbert

The simplest way would be to take the average of, say, three house valuations, work out the exact mortgage at calculation date, and take one off the other. This would leave a figure representing the shared equity in the house.

So, going by your figures, you'd be owed £215,000 - £142,000 /2 - or £36,500.

The £10,500 surplus above your deposit of £26,000 indirectly represents the monies - interest and repayment - already paid in by you and also factors the supposed house appreciation into the equation.

The only question that remains is whether your ex-partner has the capital and potential to raise a large mortgage and pay you at the same time.

silvercar

brutal_deluxe wrote: »

Thanks, I read this late!

OK yes I was considering dismissing the last 4 years as rent. Happy to do that.

I think I understand now how the equity is calculated.

So say property value (215,000) - remaining mortgage (approx 142,000) = 73,000?

Divided by two = 36,500?

Sooo, this includes my initial part of the deposit (which is equity of course) at 26,500, which leaves approx £10,000?? What's this figure??

Sorry, I was never too good with the maths

BD

That is the basic calculation, and with some equity, you can have some flexibility if necessary.

Remember if you sold up, you would (both) have estate agent fees and solicitor fees. That would reduce your equity.

Also if the situation got sticky and you have moved out, you have the mortgage debt attached to your name. Some people would say it is worth losing some money on the deal to get rid of that liability.

brutal_deluxe

Humbert_Humbert wrote: »

The simplest way would be to take the average of, say, three house valuations, work out the exact mortgage at calculation date, and take one off the other. This would leave a figure representing the shared equity in the house.

So, going by your figures, you'd be owed £215,000 - £142,000 /2 - or £36,500.

The £10,500 surplus above your deposit of £26,000 indirectly represents the monies - interest and repayment - already paid in by you and also factors the supposed house appreciation into the equation.

The only question that remains is whether your ex-partner has the capital and potential to raise a large mortgage and pay you at the same time.

Thanks - yes this is becoming a bit clearer now.

The capital she has is the ability to return my initial part of the deposit (£26,500) plus whatever extra monies (lets say £10,500)

This surely is all she needs? (I know for a fact she has this capital at her disposal)

What's the likelihood of a lender lending £142,000 (the remaining mortgage) to a single applicant these days?

Surely then its all done and dusted and everyone's happy?

Thanks again

BD

brutal_deluxe

silvercar wrote: »

Also if the situation got sticky and you have moved out, you have the mortgage debt attached to your name. Some people would say it is worth losing some money on the deal to get rid of that liability.

I am acting under the assumption that she would take on full legal responsibility for the rest of the mortgage on my leaving, thus I would be free of debt. Is it that simple?

silvercar

brutal_deluxe wrote: »

I am acting under the assumption that she would take on full legal responsibility for the rest of the mortgage on my leaving, thus I would be free of debt. Is it that simple?

Yes...if a lender is agreeable.

If she couldn't get a lender to lend her that amount then you may need to accept a lower amount in order to get your name off the mortgage (and deeds).

Humbert_Humbert

£142K loan on a £215K property (~70% LTV max) with a 40K salary should be fairly easily doable in theory.

Depends what other outgoings are factored into the decision:

Payment history
Student loan(s)
Credit-credit balances
Other necessary expenditure
Age of applicant

Of course, you would need to sign a Transfer of Equity form to release you from the mortgage.