Keeping a house after a breakup

Pixie5740

It doesn't matter whether you think you can comfortably afford the mortgage on your own. What matters is if a mortgage lender thinks you can afford the mortgage by yourself. From what you've said that is unlikely.

Whilst you are both named on the mortgage no one will be able to transfer equity anywhere without the lender's consent which I doubt they will grant.

Regardless of whether your ex needs the money or not I doubt she will want to remain financially linked to you once you part ways. It's much cleaner all round to sell and move on with your lives. If you can't buy her out and won't agree to sell she could take you to court and force the sale.

Go and see a mortgage broker but be prepared to accept that on your own you might not be able to afford the property in the eyes of a mortgage lender.

parking_question_chap

Pixie5740 wrote: »

It doesn't matter whether you think you can comfortably afford the mortgage on your own. What matters is if a mortgage lender thinks you can afford the mortgage by yourself. From what you've said that is unlikely.

£1500 left a month after mortgage, why would it be unlikely?

Marvel1

parking_question_chap wrote: »

£1500 left a month after mortgage, why would it be unlikely?

The OP said it themselves:

cha1n wrote: »

If I were to rent out a few of the rooms I could easily afford the mortgage payment (I could even cover it on my own if needs be) but I wouldn't get a mortgage on it on my own.

cha1n wrote: »

Thanks for all the replies everyone. I definitely cannot get a mortgage on my own

However if I was the leaving, I would want my money asap, not instalments that way a clean break.

hign10pines

cha1n wrote: »

Thanks for all the replies everyone. I definitely cannot get a mortgage on my own but after the mortgage payment (£1100) I have £1500 remaining from my monthly salary, so could even make the payments on my own but would prefer to have one or two roommates to help on that front.

She works in law (So we had no legal fees on the house purchase) and has explained the possibility of a transfer of equity. I could easily pay her deposit and stamp duty back in the course of a year, so this may be a possibility.

I don't fully understand the process though, so if I remained on our current mortgage (19 months remaining on fixed term) and a transfer of equity was granted then so long as I don't remortage then I can stay on the mortgage indefinitely? The interest rate goes up to 4% at the end of my fixed term but I think I'd rather do that than sell up and move into a flat.

Would the transfer of equity look bad on my ex's part? It would be a shame of she struggled to get her own mortgage in future because of it.

How much is your mortgage if a take home of £2600 a month won't cover it? (yes I know house prices in some areas are very high) Do you have debts which are lowering your affordability?

cha1n

Thanks everyone but I'm more interested in the technical facts here, comments such as 'I'd want this and that, etc' aren't very helpful. Our situation, like everyone's it's unique. We've been together since teenagers (14 years), are very good friends but just don't work in a romantic relationship any more. As mentioned, she has a large sum front inheritance and will have no desire to be paid back right away.

From what you have all told me I wouldn't be able to get a mortgage if applying from scratch as 4.5 x my salary is £175k and the mortgage amount is £240k. I was just hoping that there was some kind of loop hole with a transfer of equity or is that essentially the same as applying again? It's crazy as I do have a large sum remaining after paying the monthly mortgage instalment and I have 2 rooms that could be rented and the property is very centrally located, so renting would not be a problem.

silvercar

I was just hoping that there was some kind of loop hole with a transfer of equity or is that essentially the same as applying again?

A transfer of equity keeps the mortgage with the same lender. The lender may be more relaxed about income multiples given that (a) they are already lending on the property and (b) you can evidence that you can afford the repayments even if it doesn't meet multiples. No harm in asking.

If relations with your ex are amicable, would she be insistent on being removed from the mortgage immediately?

Pixie5740

How do you know she will have no desire to get her deposit back anytime soon? Have you asked her? What does she want to do? Is she prepared to have joint and several liability with you for a mortgage indefinitely? Will she be happy to pay the additional 3% SDLT if she decides to buy somewhere else on her own, that's assuming she can because any mortgage with you will impact her affordability? Then there's the potential CGT if/when you eventually sell the place or buy her out.

davidmcn

cha1n wrote: »

she has a large sum front inheritance and will have no desire to be paid back right away.

That may be the case, but she's unlikely to want to be financially linked with you indefinitely, as it causes all sorts of complications, and you don't appear to have any realistic timescale for when you could afford to buy her out. Better to sort it out while you're still talking and able to do something about it - have a search here for people who have trouble resolving this type of situation years after the split.

By all means investigate lenders who are more flexible about affordability and might take into account lodgers, but I suspect few will take the risk these days.

Thrugelmir

cha1n wrote: »

It's crazy as I do have a large sum remaining after paying the monthly mortgage instalment

That's only if interest rates remain at historically low levels. Lenders base affordability as if rates were at 7% levels. With such a large mortgage balance not inconceivable that your outgoings could rise to a much higher level at a later point in time.

How much do you need to pay your ex as her share of the equity?

franklee

parking_question_chap wrote: »

£1500 left a month after mortgage, why would it be unlikely?

Trapped on a higher interest rate for a start:

cha1n wrote: »

if I remained on our current mortgage (19 months remaining on fixed term) and a transfer of equity was granted then so long as I don't remortage then I can stay on the mortgage indefinitely? The interest rate goes up to 4% at the end of my fixed term

So that would be the OP paying his ex back for the first 12 months or so and then before time to build up savings the mortgage rate goes to 4%. The OP has been light on details but I assume 4% is much higher than his current deal and it sounds like his income isn't enough to remortgage onto a better deal.

If the ex really doesn't need the cash then I suppose she could become an investor in the property for longer but that's messy.