Options when separating from partner

TBagpuss

Cherry_Gale wrote: »

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.

It depends on the lender. It will be a transfer and remortgage but some lenders will, in these situations, waive the ERC if you are sticking with the same product etc and trreat is as if it were being ported. You would have to ask the lender. The person who was taking on the mortgage would have to pass affordability checks etc.

You could have a deed of spearation and have an agreement for one of you to buy out the other but set a date for that to happen - if you are in a 5 year fix then you probably don't either of you want to be locked to the other for that long, but you might be able to cme to an agreement to transfer(or sell) once you are past te first year so that the ERC is a bit lower. You'd need the agreement to set out who was responsible for what n the mean time and also to have provision forthe house to be sold if the 'buyer' is not ablwe to get a mortgage alone.

smiddle3

Hi all,

So a few months after first posting this thread and having tried to work on our relationship, me and my partner have agreed to go our separate ways and want a quick resolution to the house situation.

We have had it valued by 3 estate agents who all valued it in the 120-125k range, with all 3 saying we should realistically aim to get a little over what we paid for it (120k) if we sell. The settlement figure as mentioned in my first post (including ERC) is around 112k so, taking into account fees, selling it would leave us with roughly 6-8k to split between us depending on final sale price.

However, a friend of mine has recently contacted me to say they are also splitting up with their partner and are looking for a place to rent. I would prefer to keep the property and buy my partner out as long as I could have a lodger in to help with finances. With this option, I had a few queries:

1. Would the mortgage lender take the potential lodgers rent into account in the case of a new application if I was to get this writing?
2. My partner has said that if I was to buy them out that they would want 5k, which was what they put in for their share of the deposit when we bought the house. My understanding is, if I were to buy them out, a fair way to do it would be to offer half of whatever the equity would be in the house if it was sold (in this case 3-4k taking into account ERC). Am I right in thinking this? Also, as this is a sum of money I couldnt' afford to pay at the moment, could this be added to the sum of any new mortgage offer - have people had experience of this?

Cheers

Thrugelmir

Answer to 1. is no.

velocity_girl

smiddle3 wrote: »

Hi all,

So a few months after first posting this thread and having tried to work on our relationship, me and my partner have agreed to go our separate ways and want a quick resolution to the house situation.

We have had it valued by 3 estate agents who all valued it in the 120-125k range, with all 3 saying we should realistically aim to get a little over what we paid for it (120k) if we sell. The settlement figure as mentioned in my first post (including ERC) is around 112k so, taking into account fees, selling it would leave us with roughly 6-8k to split between us depending on final sale price.

However, a friend of mine has recently contacted me to say they are also splitting up with their partner and are looking for a place to rent. I would prefer to keep the property and buy my partner out as long as I could have a lodger in to help with finances. With this option, I had a few queries:

1. Would the mortgage lender take the potential lodgers rent into account in the case of a new application if I was to get this writing?
2. My partner has said that if I was to buy them out that they would want 5k, which was what they put in for their share of the deposit when we bought the house. My understanding is, if I were to buy them out, a fair way to do it would be to offer half of whatever the equity would be in the house if it was sold (in this case 3-4k taking into account ERC). Am I right in thinking this? Also, as this is a sum of money I couldnt' afford to pay at the moment, could this be added to the sum of any new mortgage offer - have people had experience of this?

Cheers

1. No
2. In theory, yes but it sounds like there is so little equity that it might not be possible here. If you added £4k to a £112k mortgage on a property valued at say £122k, your LTV would be over 95%. It certainly sounds like it'll end up over 90% anyway. So depends if your lender will do this.

FWIW I am in this exact situation myself right now OP (so can sympathise!) and my lender (Nationwide) will only let me take additional borrowing up to 80% LTV.

easilydistracted

Definitely buy him out and get lodgers or sell. I did the former and made quite a bit of money in the end but the responsibility for the whole mortgage on my own was scary and stressful at the time. I picked that option as the penalty decreased every year so I thought I could ride it out and eventually port. Bit different you both as the penalty is consistent. In the end I ended up paying the penalty after a couple of years as it had reduced and the market was very buoyant meaning I got a larger deposit and smaller rate. So I'd go for that option if you can manage it on your own at a stretch and comfortably with a lodger and don't mind living with others.

TBagpuss

Cherry_Gale wrote: »

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.

It depends on the lender. Some will waive the ERC. the best thing to do would be to speak to your own lender to find out whether they would be prepared to lend to you alone and if so, what the costs would be.

You could potentially consider another option where you gree to sell on a given future date, and have abn agreement about which of you will live in the proeprty and who will be responsible for costs in the mean time.

If you go down this route, get a proper departation agreement drawn up .

This might allow you to avoid massive losses by selling so soon after buying, and would give you a bit more time to save to buy her out (if that is what you would like)
(e.g iof you agreeed that the hosue would be sold in 6 months time (when presumably the ERC will reduce, and when it will be easier to sell as buyers will find it easier to get a mortgage as it won't be within 12 months of the last sale) then if, by the end of 6 motnhs, you are in a position to buy her out, you can buy the house instead of a strnager doing so, if you can't, you both get the bebenfit of the delay.

You would need to consider whether you can aford to stay for the months and if not, you may ned to take the hit and try to sell now.

MataNui

My daughter has just been through this. She bought her ex out. She was lucky that the mortgage provider just ported it into her name (after getting ex to sign some document etc). She did have to pass the affordability checks. They also changed the term and repayments.

Its difficult determining a value to buy out the other person when the equity is tight. Fortunately in my daughters case he really didnt want it to go on the market and just wanted money off her quickly so she was in a pretty good bargaining position. If it did go on the market i am sure he would have ended up with less (or nothing) and it would have taken a long time. She is still wondering if she did the right thing though. As things stand he probably got the slightly better deal (but didnt get even half of what he originally wanted from her) but in a few years she should start to see the benefit. She now has a house that will (hopefully) increase in value, he will have spent all the money on designer clothes and crap.

[Deleted User]

lol. Can tell you totally miss his presence in your daughter's life lol.

Harper123

I think the first question is how much do you earn? Do you earn enough to satisfy the mortgage company you can take on the mortgage by yourself? As if you don't it's a none starter.