Options when separating from partner

HappyMJ

hazyjo wrote: »

Can you get the mortgage on your own? Are you on a fixed rate? I would opt for 'sell'. Definitely don't want any financial ties to your ex. It will get messy if one of you meets someone else. Plus, if there's a big expense with the house and one is skint, it'll cause probs as you'll both have to pay.


You may find you're unable to sell until you've owned it a year - not sure if that's law or not, or just hard for others to mortgage.


Jx

It's not law...it's a requirement of some mortgage lenders that the property not have changed hands in the last 12 months. Only some lenders though. There are plenty of lenders that will lend on a property that has been purchased, renovated and sold within a short period of time, at a price significantly higher than the previous sale price.

Grenage

I would either take on the mortgage (buy out the other) and get a lodger, or sell.

I would prefer the first, but I am really not a fan of renting.

[Deleted User]

Pixie5740 wrote: »

Option 3: Not hugely different from Option 1 really as in order to buy your ex out you would need to get a new mortgage in your name only and repay the joint mortgage which will result in ERC.

Would it be literally treated a new mortgage, with ERC, new mortgage fees etc?

If with the same lender, could they treat it as some sort of porting?

I understand in either case affordability would be reassessed as a single borrower vs couple.

Grenage

When I split from my ex-wife (coincidentally also 6 months after purchase), the mortgage company were happy for a transfer of equity to be done, and not require a new mortgage. I 'just' met their affordability calculations.

So you don't have to get a new mortgage, it's down to the lender.

davidmcn

HappyMJ wrote: »

It's not law...it's a requirement of some mortgage lenders that the property not have changed hands in the last 12 months. Only some lenders though. There are plenty of lenders that will lend on a property that has been purchased, renovated and sold within a short period of time, at a price significantly higher than the previous sale price.

6 months is the standard period in the CML Handbook, not aware of any lenders who want 12 months (as you say, it's a sudden increase in the price which is sometimes an issue)

smiddle3

Pixie5740 wrote: »

My personal view is that when I relationship ends it's best to sever financial ties no matter how amicable the split. You don't want to be left in a situation years from now where you're stuck from moving on because you're still financially linked and have equity tied up in the property.

Option 1: You'll sever the financial link but will probably lose all your equity in ERC and solicitors and estate agent fees.

Option 2: Dependent on your lender granting consent to let so soon after taking out the mortgage. Leaves you financially linked to your ex.

Option 3: Not hugely different from Option 1 really as in order to buy your ex out you would need to get a new mortgage in your name only and repay the joint mortgage which will result in ERC.

How long would you have to wait before you wouldn't have to pay ERC? How big is the property (how many bedrooms)?

The ERC is set at 5% of the outstanding loan for the length of the deal which is 5 years. It is 2 bedrooms

smiddle3

Cherry_Gale wrote: »

If you were to rent it out entirely, you'd need to get permission from the mortgage lender - and they might not be keen so early into the mortgage. You can always ask though.

Would it work for you to buy out your ex and remain there with a lodger?
1 - will the mortgage lender allow you to take on the full mortgage, presumably affordability was based on both incomes?
2 - will having a lodger work for you financially? Have a look into the local rental market, and bear in mind that most people would expect to pay less as a lodger than as a tenant in a flatshare, due to the lower security this offers.
3 - will having a lodger suit you personally? (or perhaps, what sort of person and ground rules would suit you and them and make it harmonious)

I would have to check with the lender. I'm not sure they would though because yes the affordability was based on our incomes together (both on 22k per year).

Thrugelmir

Sell the property. Longer term the cost of being tied together by the property could be both financially and mentally draining. Money can be replaced. Mental scars remain far longer.

Pricivius

I was in this position a few years back, although we had lived in our house for 4 years when we decided to split. We rented it out for about 18 months and it was a bit of a grind, to be honest. We were very genuinely very amicable with no hard feelings, but getting joint decisions was logistically difficult. Everything took longer as I had to get hold of him, explain it all to him, get questions answered and then make a decision - I just didn't need the hassle. He had moved on and so had I, so it all seemed a bit of a pointless and annoying legacy of a relationship that we both had fond memories of!

After 2 years, we sold it. We each lost about £6k of our deposits. but it was not worth the hassle as we made very little profit (literally £125 per year!) and the property was not really increasing in value.

In retrospect, I would have sold it when we split.

KRB2725

I wouldn't want to be tied financially to a person that I was no longer in a relationship with.

If one of you ran into financial difficulties it could seriously compromise future decisions for the other party.

I would rather sell up and lose money now than remain financially linked.