Buying ex out of house share

silvercar

The house is worth £184000 with about £62000 on the mortgage = £122000 profit
split 50/50 = £61000 each

Some negotiation needed I think. Firstly don't assume any spilt will be 50/50, this is subject to agreement and can depend on who paid initial deposit. Are there kids involved? If so, the parent who has the kids often ends up with a higher proportion of the equity to allow for the need to find suitable accom for the kids.

benb76

I'd put the house on the market to get a true valuation, do not go off of some estate agent's guess. If you get no offers, or low offers, you can use this to negotiate a cheaper price with your ex wife.

My personal advice would be to sell up and make a fresh start in a new flat or house, this is talking from experience. Also a 5x salary mortgage is a large financial burden.

tanith

I agree with silvercar here, upon my divorce settlement my children stayed with their Dad in the family home (they were teenagers) and was split into thirds , myself , Dad and children so he ended up with 2/3rds more to it than you think.......

macaque_2

So if I pay the ex £61000 and then I have a mortgage for £62000 (existing mortgage) plus the £61000 I have to pay the ex. That would mean a mortgage of about 5 times my salary (eek!)

Personally, I think you would be crazy to go ahead with this plan and I would say that there is an odds on chance that you will lose the property within 3 years. If house prices go seriously sour, your will also see your positive equity wiped out or even turn into negative equity.

As a single mortgagee, your payments higher (as a proportion of take home pay) and the risk of default is increased (you don't have two incomes to mitigate risk). Once you start defaulting, your interest rates increase and the death spiral begins.

I never cease to be amazed by the utter disregard people have for the financial hazards of large debts. If I was in your shoes I would rent or buy a smaller place.

Gorgeous_George

d87heaven

I would sell but for different reasons to those aired already.

Emotionally, your ex-wife will be all over the house. When you meet the new Mrs heaven, she will not want to compete with the ghost of your ex-wife. The house will always be the nest that you made with your ex. The second Mrs heaven will want her own nest.

If prices rise, your ex will feel bitter and may want even more. She'll say you sold her short. If prices fall, you will feel bitter. You'll feel that you overpaid her for her share of the house. It is a lose-lose.

Selling up and starting again is much tidier. As others have pointed out, you may end up making £££s from a falling market although this is by no means a certainty. The crash could be more of a levelling off.

What do you think will happen to prices in your area over the next 2 or 3 years? Answer that and your way ahead is much easier to ascertain.

Good luck with whatever you decide.

GG

pinkshoes

d87heaven wrote: »

That would mean a mortgage of about 5 times my salary (eek!)

Can you get a mortgage at 5 times your salary?!?! With the current credit crunch, I was under the impression that this was highly unlikely, even with a large deposit.

I would agree with the other that selling ASAP would be the best option, then splitting equity 50/50 after all costs have been paid. This would leave you with a good deposit on a smaller property, it would beat the problem of potentially not being able to get a mortgage at 5x salary, and you wouldn't have any quarrels in the future should prices rise and your ex wife feels hard done by, and demands more.