Selling house what’s fair?

[Deleted User]

Hi,

so, if she's defaulted on mortgage payments could house be repossessed?

You say interest only, how is loan to be repaid?

Scorpio33

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

Well if you jointly own the house, then you are jointly liable for its costs. Equally, you would jointly benefit from any increase in the price that creates equity.

In theory, if you were splitting things 50/50, then in effect she would pay her "half" of the mortgage, and pay you rent on the other half. She hasn't being paying her half, but you would both suffer as a result, not just her.

Look at it another way. If she was genuinely in financial distress and couldn't afford to pay the mortgage, and you had a large equity in it, it would be in your interests to pay the mortgage whilst it is being sold: that way you can sell it for a decent price (without it being reposessed), maximise your equity out of the house and any excess that you have paid can be taken out of the sale proceeds.

I can see why you feel its not fair, but you have two options as I see it:

1) Pay the mortgage (if you can afford to) whilst its being sold and take your costs out of the final sale price.
2) Write off the house in its entirety, allow it to be reposessed effecting your credit file.


Unfortunately, you can't control what your ex does, you can only react to what the situation is.

Also, try and ignore the fact that she is your ex. Think of it as a business deal: you both own the house, they are not going to pay their share, what are you going to do?

Andlam

Scorpio33 said:

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

Well if you jointly own the house, then you are jointly liable for its costs. Equally, you would jointly benefit from any increase in the price that creates equity.

In theory, if you were splitting things 50/50, then in effect she would pay her "half" of the mortgage, and pay you rent on the other half. She hasn't being paying her half, but you would both suffer as a result, not just her.

Look at it another way. If she was genuinely in financial distress and couldn't afford to pay the mortgage, and you had a large equity in it, it would be in your interests to pay the mortgage whilst it is being sold: that way you can sell it for a decent price (without it being reposessed), maximise your equity out of the house and any excess that you have paid can be taken out of the sale proceeds.

I can see why you feel its not fair, but you have two options as I see it:

1) Pay the mortgage (if you can afford to) whilst its being sold and take your costs out of the final sale price.
2) Write off the house in its entirety, allow it to be reposessed effecting your credit file.


Unfortunately, you can't control what your ex does, you can only react to what the situation is.

Also, try and ignore the fact that she is your ex. Think of it as a business deal: you both own the house, they are not going to pay their share, what are you going to do?

Thanks, some good points to ponder over. I wouldn’t mind paying if I can re coup it, she can afford it but wants to
save as much as she can for a deposit on a new place so I’ll see what we can work out! 

Lavendyr

The above points are why I was concerned. I am worried that the lack of a consent order then could cost you more now. Benefit of hindsight and all that.

So the marital situation seems irrelevant now. The issue is that you are jointly on the mortgage. And if joint and several then if one party doesn't pay, the other is on the hook. 

I think you need to talk to a solicitor. Right now, if she's refusing to make payments and you can't. If you end up with the property repossessed then it will probably go for a lower price. I suppose that will inconvenience your ex more than you. 

Lavendyr

Scorpio33 said:

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

Well if you jointly own the house, then you are jointly liable for its costs. Equally, you would jointly benefit from any increase in the price that creates equity.

In theory, if you were splitting things 50/50, then in effect she would pay her "half" of the mortgage, and pay you rent on the other half. She hasn't being paying her half, but you would both suffer as a result, not just her.

Look at it another way. If she was genuinely in financial distress and couldn't afford to pay the mortgage, and you had a large equity in it, it would be in your interests to pay the mortgage whilst it is being sold: that way you can sell it for a decent price (without it being reposessed), maximise your equity out of the house and any excess that you have paid can be taken out of the sale proceeds.

I can see why you feel its not fair, but you have two options as I see it:

1) Pay the mortgage (if you can afford to) whilst its being sold and take your costs out of the final sale price.
2) Write off the house in its entirety, allow it to be reposessed effecting your credit file.


Unfortunately, you can't control what your ex does, you can only react to what the situation is.

Also, try and ignore the fact that she is your ex. Think of it as a business deal: you both own the house, they are not going to pay their share, what are you going to do?

This is spot on. 

Brie

Assuming you are still on the mortgage then her not paying will affect you if you want credit in the next few years.  The fact that she lives there and you don't won't matter to the bank.

_Penny_Dreadful

Andlam said:

Scorpio33 said:

If you were going to split the house equity 50/50, then you are both 50/50 liable for the arrears in my opinion. 

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

It's a joint mortgage meaning you each have joint and several liability for making the full payment each month.

getmore4less

Don't forget to work out your CGT liability.

pinkshoes

Andlam said:

But the person still living in the house has essentially lived there rent and mortgage free then for those months? While the other person has had their own housing costs to pay? 

In which case you should move back in!

Let her know that you have been more than generous allowing her to pay only the interest on the mortgage rather than the full rental value for the property, so say that unless ALL arrears are paid off within 28 days, you will be moving back into the property on 01 April 2023 so you can afford to pay the mortgage and will remain in the house until it is sold. 

Andlam

getmore4less said:

Don't forget to work out your CGT liability.

I have been thinking about this, I’m so shocked that this is a thing because I’ve not been able to buy. I wish I’d never let her stay there. Once it’s sold we are both in the same position and could both put a deposit down but I get penalised even though I’ve been forced to rent a room in a shared house all these years! I did read that the rules are Changing in April  and that may affect my situation but I don’t understand it all