Buying out partner from Mortgage that includes HTB Equity Loan

Cane86

Hi All,

New here so please forgive me if I don't follow any etiquette rules.

In a situation that I seem to be able to find little to no information about what is fair.

We are Tennant in common with 50:50 share of he property.

I want to buy out my ex from her share of the mortgage, typically I understand you would calculate equity and divide by two and that would be her entitlement. We have arrived at a valuation of 280k. So her entitlement taking into consideration the remaining mortgage and the Equity Loan that would be paid back if sold is 27k.

I then got some conservative costs of a sale and took her portion of that from her 27k theoretical share which she hasn't argued with.

The big question is, as I will have to shoulder the whole HTB loan should I buy her out. Am I entitled to reduce her share further due to me taking he total liability for the HTB loan?

My thinking was that I could say 20% of her equity divided by two.I just wanted to get opinions on this. I think it seems unfair that she should get the full equity share based on that loan being paid of as part of any sale. The loan will still exist and likely grow as the value of the property does. I know she could just say we have to sell so she doesn't lose out but I wanted to k ow my rights.

Any help would be hugely appreciated.

Regards,

Cane

Caz3121

I guess the first question is whether you taking a new mortgage for the remaining mortgage value (plus share of equity?) is possible on your income only within the HTB limit of 4.5x income with the normal affordability calculations

If affordability not an issue, would it be an option to pay off the loan early as part of this transaction and then not having the uncertainty hanging over you.

You mention you will have to shoulder the whole HTB loan if you buy her out but also say you have taken it into account when calculating the equity share due...have you used the initial value of the loan or 20% of the current value?

kingstreet

Cane86 wrote: »

Hi All,

New here so please forgive me if I don't follow any etiquette rules.

In a situation that I seem to be able to find little to no information about what is fair.

We are Tennant in common with 50:50 share of he property.

I want to buy out my ex from her share of the mortgage, typically I understand you would calculate equity and divide by two and that would be her entitlement. We have arrived at a valuation of 280k. So her entitlement taking into consideration the remaining mortgage and the Equity Loan that would be paid back if sold is 27k.

I then got some conservative costs of a sale and took her portion of that from her 27k theoretical share which she hasn't argued with.

The big question is, as I will have to shoulder the whole HTB loan should I buy her out. Am I entitled to reduce her share further due to me taking he total liability for the HTB loan?

My thinking was that I could say 20% of her equity divided by two.I just wanted to get opinions on this. I think it seems unfair that she should get the full equity share based on that loan being paid of as part of any sale. The loan will still exist and likely grow as the value of the property does. I know she could just say we have to sell so she doesn't lose out but I wanted to k ow my rights.

Any help would be hugely appreciated.

Regards,

Cane

No mention of the post-sales HTB Agent;-

http://www.myfirsthome.org.uk/schemes/help-to-buy/change-of-ownership

which has a deal of influence over such issues.