Transfer equity and buying our ex

Tweetypie90

My ex partner and I recently split. The initial plan was for me to buy my ex out. We are struggling to come to an agreement in terms of settlement figure and would like to ask what you think roughly I should give him.
We bought the house for £125000 in March 2018. We put a 10% deposit down and when 50/50 with this, government also put in with the help to buy isa scheme. There is now roughly £106000 left on the mortgage, we have split all mortgage payments since day one. We remortgaged in Jan with a 5 year fixed, they valued the house in Jan at £133000. The total amount to be repaid in Jan was £156000. Roughly how would you work out what figure to be offering? What is fair? TIA 

MovingForwards

How much are local similar properties selling for?

It would be 50% of the difference between the outstanding mortgage and the value of the property.

The ex wouldn't get their 50% of the mortgage payments as that was a roof over their head for 2 years.

Your figures make no sense as you say there was £156k to be repaid in January, but you only paid £125k for it.

Tweetypie90

MovingForwards said:

How much are local similar properties selling for?

It would be 50% of the difference between the outstanding mortgage and the value of the property.

The ex wouldn't get their 50% of the mortgage payments as that was a roof over their head for 2 years.

Your figures make no sense as you say there was £156k to be repaid in January, but you only paid £125k for it.

So next doors sold for £127 in Dec last year. 

Right so looking at 13k, I offered 10k as really going to struggle for much more. Starting to wonder if I’d best to sell it!

That figure is what it said on our remortgage document, is that with interest on top? I’ve no idea! 

greatcrested

Tweetypie90 said:

We bought the house for £125000 in March 2018. We put a 10% deposit down and when 50/50 with this,..... roughly £106000 left on the mortgage, ..... remortgaged in Jan ....valued the house in Jan at £133000.
The total amount to be repaid in Jan was £156000. ...

Original mortgage was £112,500 (90% of purchase price).

Assuming you have been paying the mortgage each month, you cannot now owe more than 112,500. Are you sure your partner has been paying his share each month? Perhaps you've been acruing arrears?

Tweetypie90

greatcrested said:

Tweetypie90 said:

We bought the house for £125000 in March 2018. We put a 10% deposit down and when 50/50 with this,..... roughly £106000 left on the mortgage, ..... remortgaged in Jan ....valued the house in Jan at £133000.
The total amount to be repaid in Jan was £156000. ...

Original mortgage was £112,500 (90% of purchase price).

Assuming you have been paying the mortgage each month, you cannot now owe more than 112,500. Are you sure your partner has been paying his share each month? Perhaps you've been acruing arrears?

Sorry ignore that final figure I posted I don’t know what that is? I’ll have to check again in the morning! So ignoring that there’s £107000 left to pay, yes he has been paying no arrears 

greatcrested

So

We bought the house for £125000 in March 2018. We put a 10% deposit down and when 50/50 with this,..... roughly £106000 left on the mortgage, ..... remortgaged in Jan ....valued the house in Jan at £133000.

You have £27,000 equity in the property: £133,000 - £106,000 (market value less outstanding mortgage) based on January figures (which you need to update). So £13,500 each. But from this you also need to deduct costs: say £1000 legal fees (maybe less) but then mortgage redemption fee. You fixed for 5 years in Jan so I'm guessing there's a significant Early Redemption Fee - you need to ask your mortgage lender how much and deduct that also. So say that is £2000 that's £2K + £1K = £3K = £1,500 each deducted form you £13,500.

Your equity is now £12,000 each.

So you offer to pay him £12K.

Obviously all my figures are examples and you need to substitue up-to-date market value, outstanding mortgage, Early Redemption fee, legal cost etc.

(and check what that strange £156000 figure was!)

blue_max_3

Tweetypie90 said:

So next doors sold for £127 in Dec last year. 

Right so looking at 13k, I offered 10k as really going to struggle for much more. Starting to wonder if I’d best to sell it!

That figure is what it said on our remortgage document, is that with interest on top? I’ve no idea! 

Given property prices are softening, I think you're about right there at £10k. How did he respond? 
Can you remortgage in your own name? It only makes sense if you can. And do you have somewhere else to live if you did sell? Though I'd strongly suggest you stay as the costs of selling and buying are going to eat into any equity.

Tweetypie90

greatcrested said:

So

We bought the house for £125000 in March 2018. We put a 10% deposit down and when 50/50 with this,..... roughly £106000 left on the mortgage, ..... remortgaged in Jan ....valued the house in Jan at £133000.

You have £27,000 equity in the property: £133,000 - £106,000 (market value less outstanding mortgage) based on January figures (which you need to update). So £13,500 each. But from this you also need to deduct costs: say £1000 legal fees (maybe less) but then mortgage redemption fee. You fixed for 5 years in Jan so I'm guessing there's a significant Early Redemption Fee - you need to ask your mortgage lender how much and deduct that also. So say that is £2000 that's £2K + £1K = £3K = £1,500 each deducted form you £13,500.

Your equity is now £12,000 each.

So you offer to pay him £12K.

Obviously all my figures are examples and you need to substitue up-to-date market value, outstanding mortgage, Early Redemption fee, legal cost etc.

(and check what that strange £156000 figure was!)

So apparently the strange figure is what the mortgage will cost us including the interest! 

Also there shouldn’t be a redemption fee as fingers crossed it’s just a transfer of equity? He is asking for £13000

Tweetypie90

blue_max_3 said:

Tweetypie90 said:

So next doors sold for £127 in Dec last year. 

Right so looking at 13k, I offered 10k as really going to struggle for much more. Starting to wonder if I’d best to sell it!

That figure is what it said on our remortgage document, is that with interest on top? I’ve no idea! 

Given property prices are softening, I think you're about right there at £10k. How did he respond? 
Can you remortgage in your own name? It only makes sense if you can. And do you have somewhere else to live if you did sell? Though I'd strongly suggest you stay as the costs of selling and buying are going to eat into any equity.

He says he wants £13000 minimum and if not to sell the house. Does £13000 seem too much? He says he only wants his fair share and feels screwed over if he gets less, but I find it madness he can walk about with that much after such a short period of time 

Moneyravingexpert

blue_max_3 said:

Tweetypie90 said:

So next doors sold for £127 in Dec last year. 

Right so looking at 13k, I offered 10k as really going to struggle for much more. Starting to wonder if I’d best to sell it!

That figure is what it said on our remortgage document, is that with interest on top? I’ve no idea! 

Given property prices are softening, I think you're about right there at £10k. How did he respond? 
Can you remortgage in your own name? It only makes sense if you can. And do you have somewhere else to live if you did sell? Though I'd strongly suggest you stay as the costs of selling and buying are going to eat into any equity.

Hiyah- based on some chats I’ve had with EA theyve said the opposite about house prices softening and given the recent stamp duty announcement they think they’ll only go up. Of course im no expert and this could be drivvle! Houses have been flying off the market here with very little difference to prices... unless it’s region specific maybe?? 

blue_max_3

Moneyravingexpert said:

Given property prices are softening, I think you're about right there at £10k. How did he respond? 
Can you remortgage in your own name? It only makes sense if you can. And do you have somewhere else to live if you did sell? Though I'd strongly suggest you stay as the costs of selling and buying are going to eat into any equity.

Hiyah- based on some chats I’ve had with EA theyve said the opposite about house prices softening and given the recent stamp duty announcement they think they’ll only go up. Of course im no expert and this could be drivvle! Houses have been flying off the market here with very little difference to prices... unless it’s region specific maybe?? 

Where are you? Never heard an estate agent say prices were going down, but am prepared to be proven wrong. Their very existence depends on rising values. I'm sure some parts will weather the storm better than others.