Splitting up, any advice appreciated

sideysid

Hi Guys,

Im in my late twenties and been in my latest relationship for 5 years, but we have finally reached a mutual point after much discussion where we feel it is better if we go our seperate ways. We have no children, only a cat which will stay with the gf.

We own a 3 bed house together for a year in a joint mortgage, which is now estimated to be around £320k. We owe around 235k on the mortgage as we had a flat beforehand together.

I am planning for a bit of a life change (and to clear my head), and will go to NZ travelling (as I have friends out there) for around 6 months to a year.

I have approximitey around 3k on one credit card and £200 on another, with around 2k left on my student loan (which automatically comes out from my wages).

The gf wants to rent the house out however rather than sell, as we have a two year fixed mortgage and will incur a redemption, so I will not be able to clear off my current debts right away with the proceeds from the house.

I will for the time being move back to my mum and dads for the time being, and they will not be taking any rent etc to help me pay off the debt.

Sorry for waffling but Im pretty new to all of this, so is there a way I can 'freeze' a debt with minimum interest for a period of time? As I would rather get away sooner rather than later.
Also I have built up quite a few possessions in the house (plasma tv/av setup etc) so Im thinking selling these, as I assume they will only get abused by anyone renting etc.

Just need to bounce things off people at the mo, as understandably, things are hard at the momement...

Thanks

cells

sideysid wrote: »

Hi Guys,

Im in my late twenties and been in my latest relationship for 5 years, but we have finally reached a mutual point after much discussion where we feel it is better if we go our seperate ways. We have no children, only a cat which will stay with the gf.

We own a 3 bed house together for a year in a joint mortgage, which is now estimated to be around £320k. We owe around 235k on the mortgage as we had a flat beforehand together.

I am planning for a bit of a life change (and to clear my head), and will go to NZ travelling (as I have friends out there) for around 6 months to a year.

I have approximitey around 3k on one credit card and £200 on another, with around 2k left on my student loan (which automatically comes out from my wages).

The gf wants to rent the house out however rather than sell, as we have a two year fixed mortgage and will incur a redemption, so I will not be able to clear off my current debts right away with the proceeds from the house.

I will for the time being move back to my mum and dads for the time being, and they will not be taking any rent etc to help me pay off the debt.

Sorry for waffling but Im pretty new to all of this, so is there a way I can 'freeze' a debt with minimum interest for a period of time? As I would rather get away sooner rather than later.
Also I have built up quite a few possessions in the house (plasma tv/av setup etc) so Im thinking selling these, as I assume they will only get abused by anyone renting etc.

Just need to bounce things off people at the mo, as understandably, things are hard at the momement...

Thanks

Glad you have no kids, it would be far harder if you did.



As to what id do in your situation.


I would offer the ex-GF to buy the house from you. If it is worth 320k, offer her your half for 160k. The mortgage on the house is 235k so half of that is your debt, or £117.5k


Which gives you a net profit of 42.5k (160-117.5). Or exactly half the equity in the house.



So I would say to the ex-GF, I will hand the house over to you for 42.5k. To which she either agrees (which I think would be likely) or you insist that you want to sell.



With that clear your debts, and you have 40k.


Put that into a savings account at 6.25% earning £2600 per year in interest. Even if you spend £10k in NZ, at the end of the year you will still have over £30k in the bank.



Letting out with an ex-GF will be too difficult, who is the landlord that has to go fix the boiler or the window when something goes wrong. Who pays the mortgage, what happens if they stop, what happens if you get !!!! tenants and they don’t pay the rent, who will pay the mortgage? What happens if she one day wants to sell, and you don’t?


Best thing is to split up the assets now, or you are tied together, for better or for worse, and most cases it will be worse!

we_are_always_skint

i dont agree... i think you shoudl let the house out but only for the term of time agreed now by the both of you - that way your equity should rise even more and when you come back from travelling in a year you can sort it all then.

if you do it now you cant really leave the country until it has all gone through and that will be just another massive weight on your mind - you sound like you and your gf are still good friends so as long as you are then im sure you can come to some sort of agreement

as far as tenants not paying etc.... there are letting agencies who pay you no matter what (although they are sometimes a bit dearer in commision) and as long as you are getting your mortgage paid then you dont really need to make any money out of the let do you.

as for personal possesions - i would not leave them there as you never know what could happen, can you not split possesions now and put yours into storage or into someones garage?? im sure a friend would glady look after your hi-tech things lol

freezing debt etc - i have no idea how that goes but most estate agents have independant financial advisers that work for you for free so maybe go and see one for their advice

good luck

sideysid

Thanks for the input, and your figures have helped me get a perspective of what Im looking at.

I do agree that selling will probably be the easiest option, and I will discuss this with her.

It just seems such a shame what with all the belt tightening and scarifices I've made over the years, to give up my share of this asset that is still rapidly rising in value.

Im just not sure that even 30k would be enough to put down as a deposit when I return to this country and start looking for a decent 1 bed flat for myself in a year.
Its all quite frustrating and emotionally draining, but I keep telling myself I've still got plenty of time ahead at 27.

sideysid

Cheers we_were_always_skint (phew)

That was along the lines I was thinking of, and I'll look into the letting agency side of things.

I could lend out all my AV gear, but none of my friends and family know how to work it! (Im forever going round to sort out theres for them) so I'll probably garage it.

I would just need to clear my immediate debts, as Im quite confident I can find work in NZ, and can stay with friends so I won't need a massive amount to get me there.