Potential breakup when owning as Joint Tenants

Racky_Roo

I've been through exactly this and with hindsight i'd say don't let him rush into any long term decisions until he is mentally stronger. People tend to want to run away from any responsibility and hide when they have severe depression and later regret a lot of decisions made in the moment.

If he wants to move out, could you offer to take in a lodger to cover his half of the bills and then review when he's felling better? It'll give you a chance to pay off more of the mortgage and wait for the market to balance out as well as maybe get a further pay rise to buy him out if you can't work things out.

Good luck, I know how painful and stressful this is, but things do improve and just being there for him and being supportive will be a great comfort, even if he doesn't seem to appreciate it right now.

Titus_Wadd

I split up from my first husband 30+ years ago and stretched every £ I had to buy him out and stay in our house.  At the time it felt like the path of least hassle but it was crippling financially.  Please think long and hard if the time comes and you do split up.

I also have experience of living with and alongside depression and hopefully your partner will get the help and support they need.  Do you think it likely he will want to leave?  You sound calm and rational about the possible split, but if the day comes you may have a flood of emotions that will make it hard to take tough decisions.  Maybe you could both stay in the same house more as room mates while he's seeking help and until meds have time to kick in, just to remove that perceived pressure on him.  I wish you both the best of luck, but try to defer any snap decisions until you're both okay.

TBagpuss

As others have said, if you sell the house then you may well have ERC to pay, as well as the costs of selling , and your mortgage is likely to be higher than you've suggested as most of what you have paid so far will be interest, not capital.

If you wanted to buy out your partner you'd need to agree on the value of the house and work out the equity -  yo effectively aim to work out what you would each get if you sold, and then for you to pay him 50% of that.

So if you work out that if you sell you would each end up with £5,000 then you would need to be able to get a mortgage for the amount of your current mortgage + £5,000. You'd need to budget for legal costs to transfer the property and to remortgage. 

Other options:

You could agree to keep the house until your current mortgage deal ends - you'd need to come to an agreement about the terms -it might be (if he wanted to move out) that it was on the basis that he moves out, you pay the mortgage  and you agree that the house is sold when your current fix ends, with the equity split equally at that point, and with you having first refusal to buy,
alternatively, if you could raise the extra you could buy him out now on the understanding that the property is held by the two of you with a declaration of trust that you have 100% of the beneficial ownership and that you will release him from the mortgage when the fix ends (at which point you would either remortgage into your sole name, or sell) 

In either case you'd need to get a formal separation agreement / declaration f trust drawn up so you have a very clear, legal arrangement in place. 


Talk to a mortgage advisor about what you might be able to borrow in your own right - if your current mortgage is over 25 years then you may want to look into whether you can borrow more if you take it out over a longer period, and you may also want to speak to you current lender to see whether, if you were remortgaging into your sole name but staying with them, they would waive the ERCs (they don't have to, but sometimes will) 

Shorter term, have you thought about going to Relate to see if you can improve the situation with your partner, and trying to encourage him to seek help through his GP or other services to get help with his health issues. ? 

fiwen30

Racky_Roo said:

I've been through exactly this and with hindsight i'd say don't let him rush into any long term decisions until he is mentally stronger. People tend to want to run away from any responsibility and hide when they have severe depression and later regret a lot of decisions made in the moment.

If he wants to move out, could you offer to take in a lodger to cover his half of the bills and then review when he's felling better? It'll give you a chance to pay off more of the mortgage and wait for the market to balance out as well as maybe get a further pay rise to buy him out if you can't work things out.

Good luck, I know how painful and stressful this is, but things do improve and just being there for him and being supportive will be a great comfort, even if he doesn't seem to appreciate it right now.

Thank you, that’s very kind and I appreciate it.

I could afford all the bills on the house without a lodger (as I’m sure we all know, affording the mortgage doesn’t mean you have the ‘affordability’ to get a mortgage!). To my knowledge, he has no plans to move out at the moment. He has a room still spare with his parents, but all his friends either live with partners or still live at home. I’m in no rush to be rid of him from the house! Just wanting to get some more info to future proof my own decisions.

fiwen30

Titus_Wadd said:

I split up from my first husband 30+ years ago and stretched every £ I had to buy him out and stay in our house.  At the time it felt like the path of least hassle but it was crippling financially.  Please think long and hard if the time comes and you do split up.

I also have experience of living with and alongside depression and hopefully your partner will get the help and support they need.  Do you think it likely he will want to leave?  You sound calm and rational about the possible split, but if the day comes you may have a flood of emotions that will make it hard to take tough decisions.  Maybe you could both stay in the same house more as room mates while he's seeking help and until meds have time to kick in, just to remove that perceived pressure on him.  I wish you both the best of luck, but try to defer any snap decisions until you're both okay.

This is so lovely, thank you.

I really don’t know if he’ll actually want to split up or not. Without going into too much detail, this is linked to a health condition of his - he told me he’s not been able to think clearly about anything for a while now, and has just been filled with overwhelming dread. We had spoken about him getting in touch with his hospital team for mental health support, but he doesn’t want me involved in this, and so I don’t know if he’s started that process or has changed his mind.

I haven’t raised the idea of selling the house, but it has been in the back of my mind - I find that planning out worst case scenarios helps me to focus.

You’re right in that if this does come to pass it’ll be incredibly difficult. But I’ve faced other incredibly difficult (albeit, different) things before, and I think I would be ok, in time.

We are still a couple right now, but just taking things a day at a time. I’m working with my own therapist too to help me through.

fiwen30

TBagpuss said:

As others have said, if you sell the house then you may well have ERC to pay, as well as the costs of selling , and your mortgage is likely to be higher than you've suggested as most of what you have paid so far will be interest, not capital.

If you wanted to buy out your partner you'd need to agree on the value of the house and work out the equity -  yo effectively aim to work out what you would each get if you sold, and then for you to pay him 50% of that.

So if you work out that if you sell you would each end up with £5,000 then you would need to be able to get a mortgage for the amount of your current mortgage + £5,000. You'd need to budget for legal costs to transfer the property and to remortgage. 

Other options:

You could agree to keep the house until your current mortgage deal ends - you'd need to come to an agreement about the terms -it might be (if he wanted to move out) that it was on the basis that he moves out, you pay the mortgage  and you agree that the house is sold when your current fix ends, with the equity split equally at that point, and with you having first refusal to buy,
alternatively, if you could raise the extra you could buy him out now on the understanding that the property is held by the two of you with a declaration of trust that you have 100% of the beneficial ownership and that you will release him from the mortgage when the fix ends (at which point you would either remortgage into your sole name, or sell) 

In either case you'd need to get a formal separation agreement / declaration f trust drawn up so you have a very clear, legal arrangement in place. 


Talk to a mortgage advisor about what you might be able to borrow in your own right - if your current mortgage is over 25 years then you may want to look into whether you can borrow more if you take it out over a longer period, and you may also want to speak to you current lender to see whether, if you were remortgaging into your sole name but staying with them, they would waive the ERCs (they don't have to, but sometimes will) 

Shorter term, have you thought about going to Relate to see if you can improve the situation with your partner, and trying to encourage him to seek help through his GP or other services to get help with his health issues. ? 

This is very practical, and covers bits I hadn’t thought/didn’t know about, so thank you!

Ours is a 35 year mortgage and we’re only 10 months in, with 3 years fixed interest of about 3.76%, I think.

From the sound of things, between ERCs, selling fees, & buying fees, it doesn’t look like I’d end up with enough cash left to front a 10% deposit to buy something straight away, regardless.

We only have about 5.5k saved jointly (no individual savings), so if the equity from the house will be mostly eaten up by ERCs, then it looks like we might only be coming away with a couple of grand each, in the end. Which obviously isn’t ideal for moving on to alternate housing.

Exodi

fiwen30 said:

Ours is a 35 year mortgage and we’re only 10 months in, with 3 years fixed interest of about 3.76%, I think.

From the sound of things, between ERCs, selling fees, & buying fees, it doesn’t look like I’d end up with enough cash left to front a 10% deposit to buy something straight away, regardless.

Your numbers don't look correct to me but you can easily check what the current balance of your mortgage is. I'd estimate you are paying about 75% interest / 25% principal, so your mortgage payments have probably only taken off around £900 from the balance. You could confirm this very easily and quickly by logging into online banking.

Secondly, with regards to ERC, as an example, Nationwide charges 3% with '3 years to go' in a fixed term, 2% with 2, 1% with 1. You'd obviously delay to your second year of the term, but you could be facing an ERC charge of 2% of the balance.... just under £2,000.

Estate agent will probably want 1% of the value - £1.2k... Solicitor will probably want around £800... that's another £2k.

On the plus side - rents and such have gone up partly because house prices have gone through the roof. If you are selling - even 10 months after buying, it's not unlikely you're house has gone up in value - to an extent that the costs above are likely to be covered.

I know it's easier said than done, but in an ideal world - you'd buy him out. No ERC payable if you stick with the lender (you can get a 'further advance' mortgage with the same lender to raise additional funds to buy him out), no estate agent costs, much more cost effective. The only issue is the house increasing in value could work against your favour (as it'll cost more to buy him out).

Titus_Wadd

Fiwen30, wishing you the best of luck; you sound very level-headed and compassionate at the same time.  I hope he gets the help he needs.

gwynlas

Sorry to hear that you are in this situation and that your boyfriend is sufferring mental illness  at the moment.
Others have given you valuable advice already so i would just add that it would appear to make no sense to sell whilst you are in this fixed rate period as it is likely that you would noth lose out financially. You also did not mention if the property was a new build in which case you would have paid an additional premium and the house miight not sell for so much second hand,
I would not dismiss the idea of a lodger out of hand as you might find someone who only wants Monday to Friday or even just a couple of nights a week. Dependent on where you live there might also be speople looking for short term accommodation.
Hopefully he will find help soon and the situation will resolve itself/