Split from Fiance

Vobill

So here's the thing - my fiance and I have split up and have a joint mortgage together. We both went in halves on the initial deposit and halves on the entire bills including mortgage so there's no dispute there.

My intention (and he'd relatively happy for this to happen) is to buy him out with some assistance from my family. The house price has risen in the 4 years we have lived there and this will obviously need to be agreed in to the settlement.

What I'm slightly confused about is how much is a fair amount to pay him? Say for example the house price has gone up £30,000 while we've lived there. Do I offer half of the original deposit and half of how much the house value has risen?

Also, I don’t earn enough to be able to pass the mortgage over to me solely so I am thinking of getting a parent put on as a guarantor? Then, my plan is when all’s done, I’ll rent one or both of the other rooms out to pay for the other half of the bills and mortgage.

We’re still both living there at the moment and are on talking terms but I just need this situation ended so we can finally go our separate ways.

Help please? x

HappyMJ

As you've gone half on everything it's quite easy.

Value property. Deduct 10% for sale and marketing costs. Deduct mortgage. Split the remainder and offer something around that figure. He'll either refuse, offer to buy you out or ask for the property to be sold. It's now up to you to negotiate.

Vobill

Thanks for the speedy reply.

So we get the property valued (from a few estate agents and take the average?), say for fictional example purposes we bought it for '90' and it's valued at '100'. We put a deposit of '15' down and have made mortgage repayments and have around '60' left to pay.

With your suggestion it'd be: 100 (value) deduct 10% (costs) = 90. Then deduct remainder of mortgage = 30 and then halve that = 15 (offer).

Another thing, surely I don't have to include half of the mortgage payments in my offer to him otherwise he's effectively lived there for free.

He's more clued up on this than me and I don't want it to be to my detriment because he did say I can't deduct the sale and marketing (and ending the mortgage early penalty) costs because I won't have to pay that because we're not actually selling it.

ViolaLass

I don't see that deducting a penalty that you won't actually have to pay would be fair. That said, won't you need to go to a new deal now that it's only you?

And 10% for sale and marketing seems steep to me. I wouldn't agree to that in his place.

Vobill

ViolaLass wrote: »

I don't see that deducting a penalty that you won't actually have to pay would be fair. That said, won't you need to go to a new deal now that it's only you?

That's what we were discussing and what he said. The counter argument is if we do sell it, we will both lose out on dividing those costs.

Also, not sure how the lender will see it. Will I have to go to a new deal if I'm literally swapping him for a parent?

foxy-stoat

It will be a new application. I would wait and see if you can get a mortgage in principle before talking figures as you may well have to sell up if you do not fit their or others affordability calculator.

Just for information, Estate Agents fees are around 1-2% of the sale price, plus legals of around £1000.

To do the transfer of equity your legals may be a bit cheaper, he may want a solicitor as well.

[Deleted User]

I'm in the same boat. I've paid off my ex though and his name is staying on until July while we are in a redemption fee period.


I can afford the repayments but no bank will give me a mortgage on my own for the value I would need. We have a son and I'd love to stay where I am. But he wants to buy himself so cannot remain on the mortgage.


Not sure my parents pension income will even let them be named on a mortgage as they are both almost at state pension age.


Crappy situation all round we are also civil and its much better.

ViolaLass

Vobill wrote: »

That's what we were discussing and what he said. The counter argument is if we do sell it, we will both lose out on dividing those costs.

But if you don't sell, no one will have to pay those costs so there's nothing to split. Splitting selling costs makes sense as presumably you will sell one day and have to pay those costs but the mortgage penalty is, as yet, an unknown.

You need to focus on finding out whether you can actually get the mortgage you need.

Goldiegirl

foxy-stoat wrote: »

It will be a new application. .

It may not have to be a new application. Many lenders will do a Transfer of Equity', which means keeping the same mortgage, but changing the names of a borrower (eg joint borrower to sole, sole to joint, or joint but removing one borrower and adding another)

Historically, it would be quite common for one party to be removed, and the remaining borrower's parents would act as guarantor.

However, things are very different now, so speak to your lender ASAP to find out whether what you are proposing is feasible.

If not, a broker would probably be of help, as he/she would be able to suggest a lender that may be suitable.

haze46

I was in the same situation as yourself 2 years ago, when we split up we had joint mortgage in both names but my property had actually lost value. Like you i wanted to have my parent on the mortgage as I wasn't sure I get it on my own salary.

First things to consider is if your parents are still working and are going to co-sign your mortgage the bank will only give you a mortgage for the length of time they have until they retirement.

If they are retired you may still get a guarantor mortgage but be asked to pay a lump sum in a holding account. Fine if your parents are able to ring fence a lump sum i.e £20,000.

In any case the it will still be treated as a new application and will have to be underwritten. The regulations around mortgages has recently changed to so be prepared to have to provide a lot more information about your spending habits, mortgage applications are much stricter than they use to be.

Another major factor for the bank now is other debt. I was told upon meeting with the bank that I would be provisionally granted the required mortgage for the property but only if I could make everything else disappear this included overdraft and credit card, credit accounts etc. My Dad duly helped with this and I made the application on my own name.

Since there was very little equity in the property we agreed that I would give my Ex his deposit back (which was not very much but again my Dad paid). I also had a legal bill to pay as it had to be set out in a legal decree that we exchanging property rights for XXXX amount etc etc. The bill for this was about £1200 and I had to pay the bank £210 to change the title deeds. All of this was under Scotch law so may differ slightly but my best advise to you would be have a frank chat with your parents and your bank to see realistically what you can afford.

Good Luck

chappers

Get the property valued, how you do that is up to you, I would suggest getting an independent surveyor to do this. Split their fees down the middle, deduct the outstanding mortgage, the mortgage company will be able to give you the redemption figure and then split the remaining equity 50/50.
Share the legal fees for the transfer of equity, EA fees are irrelevant if you're not selling up.