Its all a bit of a mess

Mr_Curious

Hi Guys,

Opinions and experiences sought please. Go easy on me, I'm fragile!

My situation is that me and my newly Ex bought a house. The problem is that the relationship has now broken down. The finances are a mess and a lot to do with the house.

Fixed rate mortgage to end of 2019. It is at this point that I need to remortgage to try and buy her out of the house. We are currently joint tenants. My affordability will be pretty stretched to remortgage the full amount required. I am also saving a good wedge to try and bridge the gap.

My questions would be -

Would it be better to change ownership to tenants in common and make any allowed overpayments without incurring a charge? As opposed to putting the money away in as high interest accounts until required? Would banks look favorably seeing that over payments have been made? Also am I right in thinking that overpayment is pure capital that is payed off and not interest?

By changing to tenants in common the equity could be divided up if it happened that a sale was the only way forward. Does that sound right? Would a legal contact have to be drawn up to explain the equity/overpayment thing? Clearly it is not in my interest to overpay if I will lose half of it.

As I said, things are a mess. We are amicable about things at the moment but I'm just trying to look forward and protect myself.

I hope this makes some modicum of sense.

Thoughts and opinions please. Any experience welcome!

Mr_C

National_Debtline

Hi Mr Curious,

Mr_Curious wrote: »

Hi Guys,

Opinions and experiences sought please. Go easy on me, I'm fragile!

My situation is that me and my newly Ex bought a house. The problem is that the relationship has now broken down. The finances are a mess and a lot to do with the house.

Fixed rate mortgage to end of 2019. It is at this point that I need to remortgage to try and buy her out of the house. We are currently joint tenants. My affordability will be pretty stretched to remortgage the full amount required. I am also saving a good wedge to try and bridge the gap.

My questions would be -

Would it be better to change ownership to tenants in common and make any allowed overpayments without incurring a charge? These are actually 2 different questions. With regard to the tenants in common you should consult a solicitor about your best course of action. With regard to overpayments and potential charges, you will need to check the terms and conditions of your mortgage. As opposed to putting the money away in as high interest accounts until required? Would banks look favorably seeing that over payments have been made? Also am I right in thinking that overpayment is pure capital that is payed off and not interest? All of these relate to the terms and conditions of the mortgage, so check them carefully. Some mortgages allow overpayments, fee free up to a certain point, others are unlimited and some do not allow any without a penalty.

By changing to tenants in common the equity could be divided up if it happened that a sale was the only way forward. Does that sound right? Would a legal contact have to be drawn up to explain the equity/overpayment thing? Clearly it is not in my interest to overpay if I will lose half of it. Again, you need to check all of this with a solicitor. Obviously if you do overpay you want that to be taken in your favour – but I don’t know if this is possible.

As I said, things are a mess. We are amicable about things at the moment but I'm just trying to look forward and protect myself.

I hope this makes some modicum of sense.

Thoughts and opinions please. Any experience welcome!

Mr_C

Laura
@natdebtline

Thrugelmir

Every week there are new posts on this forum with questions on topics in a similar vein. The sooner you deal with the property, the mortgage and the related financial matters the better. For no better reason that you'll both be able to move on with your respective lives. As soon as one partner expresses an interest to stay in the property for an extended period the problems start. The vast majority of people have no legal documentation drawn up at the outset. Which then leaves the non resident partner potentially no option but to force a sale through the courts. Which is hugely expensive. Resulting in neither party winning, in reality both losing.