Advice needed on splitting up and buying partner out of house

CharlotteChilt

Hi would really appreciate any advise on this matter. Bit of background; My partner and I bought a house together 6 years ago (88K), at the time I was a student so we made the decision to not include me on the mortgage as would have reduced the amount we could borrow, although I put down half of the deposit and paid half of everything since and  we are in agreement that I own half the house (just not legally).

We are now splitting up and he has agreed that I can stay in the house but need to buy him out. The property has been valued at about 150k (did a lot of work to it)  and there is about 50K left on the mortgage, meaning equal split we both walk away with 50k. However I'm not sure how we proceed, if I was on the mortgage I guess it would be simply a case of remortgaging to release 50k that he could take forward. But as I'm effectively buying the house off him how would this work with a mortgage, ideally I'd like to put my 50K back in to the house to minimise LTV,  but how would this work if that money is coming from the sale of the same house?     

Thanks

Spogchait

Maybe I’m oversimplifying but it strikes me you need to “buy” the property for £100k funded with a mortgage in your name only..  the full £100k is paid to your ex, £50k of the funds will go to discharge the original mortgage and £50k Is your ex’s profit.  Your  ex is the vendor selling at £100k and you are the purchaser.. You will end up with a £150k value house and a £100k mortgage all in your name.  Just treat it as if you were buying the house from scratch.

Caz3121

Spogchait said:

Maybe I’m oversimplifying but it strikes me you need to “buy” the property for £100k funded with a mortgage in your name only..  the full £100k is paid to your ex, £50k of the funds will go to discharge the original mortgage and £50k Is your ex’s profit.  Your  ex is the vendor selling at £100k and you are the purchaser.. You will end up with a £150k value house and a £100k mortgage all in your name.  Just treat it as if you were buying the house from scratch.

which would mean the OP needs a lender that gives 100% mortgages....
LTV is based on property value or purchase price - whichever is lower...buy for £100k borrow £100k = 100%

Spogchait

Best to talk to a financial advisor as to whether a lender will accept your £50k equity as part of the purchase price as  the actual value of the house is £150k.   An alternative way through this is to talk to the current lender and see if you can be added to the mortgage, the share of the house conveyed to you then go from there.  You can then remortgage for £100k.