Separation (unmarried) with joint mortgage

EclipseHAP23

Hi all, 

My partner and I are separating (unmarried) but we are joint mortgage holders on our property. My partner wishes to buy me out potentially, and we understand that this means new affordability checks etc for them in the mortgage. We have a deed of trust and discussing split of equity etc.

I have a few questions i wanted to put out there please:

1) If I am removed from the mortgage, how is this likely to affect my credit score and how long for? I am between jobs so unlikely to be able to apply for a mortgage at the moment. I’m hoping to asap, so I want to know about this. I am also unsure how long the financial association lasts. 

2) Has anyone heard of lenders splitting mortgages when people separate? I know this has happened for some friends in the past but not sure if anyone has heard of it recently. I realise that ultimately it would be down to the lender but just curious to hear experience. 

3) Things are amicable but I’ve never navigated something like this. As the person being bought out, would you recommend instructing a solicitor? I am leaning towards yes but if it is amicable, what do you think? Obviously my ex would need to as a buyer. 

Thank you in advance, 

DE_612183

1. Should not affect your ability to apply for credit in the future - btw scores mean nothing it depends on a lenders view of the risk you are.
2. Don't understand the question - do you mean that you and your ex have a £200k mortgage and you will both have a £100k mortgage - I don't see how you could do this without new mortgages as they are secured against individual properties.
3. To alter the deeds of the property you'd be advised to have a solicitor represent you.

Brie

3 - I would definitely have a solicitor and specifically one of your own rather than a shared one with your "ex".  I suspect even a decent solicitor would agree with this as there would be a conflict of interest in dealing with 2 parties such as yourselves.  

2 - I've never heard of splitting a mortgage.  So generally either one is able to take it all on, buying the other out or the property is sold so each can get their split.  

1 - And having a mortgage showing as settled on your credit history should be a positive thing in itself.  It shows you have less debt to manage and so are less of a risk.  This is because the mortgage will currently be shown as a total that both you and your ex owe.  And if your ex walked away it would be down to you to keep making payments on your own.  That's what scares the banks.  So if the mortgage was for £200k and the 2 of you had managed to pay off £20k then on both your credit records it would show as £180k owing.  Not that you owe £90k each.  Hope that makes sense and isn't stating the obvious - some people don't realise how it's reflected. 

The credit score itself is fictional and something only you ever see.  The banks want to see what makes up your credit risk and that's the details on the credit record.  So be sure to have that tidy - overdrafts that you have available (whether you use it or not), credit cards that are getting minimum payments (always pay at least a couple of £ more), lots of catalogue accounts (a big temptation and very high %).  Do be sure you are registered to vote - even if you have to update the address at some point soon.  

Really there is no association once you have separate addresses generally as long as the mortgage is no longer joint and there are no other joint accounts of any sort.

fyi - when you talk to a solicitor you might want to think about what other assets should be split if possible.  If he's been a higher earner and has a bigger pension as a result perhaps - this is one of the things that is looked at with married couples but I would hope that a reasonable couple of any sort would consider all of these things when splitting up.

EclipseHAP23

Thank you so much. Absolutely agree on credit score - it was more the overall impression left but thanks for your responses. It’s strange, a fair number of friends have split their mortgages when they separated but it clearly isn’t common. Thank you again. Really appreciate it. 

DE_612183

EclipseHAP23 said:

Thank you so much. Absolutely agree on credit score - it was more the overall impression left but thanks for your responses. It’s strange, a fair number of friends have split their mortgages when they separated but it clearly isn’t common. Thank you again. Really appreciate it. 

What do you mean by "split" their mortgages?

saajan_12

The main thing to think about is the sale price and equity split. 

1. Sale price - have you agreed a number based on the average of valuations?
2. Equity split - have you agreed what % of the equity you get back? Can be tricky to agree whats fair if the deposit and/or mortgage have been uneven, and there's no right answer but as long as you're happy with what's agreed. 
3. Timing - will you get your money straight away or would you ahve to wait? IF there's a wait then how can ex guarantee it'll be sent without you having to chase? 
4. Stamp duty / costs - if you purchase a new property soon, then you may have additional costs for stamp duty (esp as you're not a FTB anymore) plus surveys, solicitors etc. Are you comfortable with paying that yourself or would you want that included in the calculation of what % you get from this property?

Depending on how comfortable you are with the above, then the actual transaction of getting off the property transferred is fairly simple, so there's little difference a lawyer can make. 

Albermarle

fyi - when you talk to a solicitor you might want to think about what other assets should be split if possible.  If he's been a higher earner and has a bigger pension as a result perhaps - this is one of the things that is looked at with married couples but I would hope that a reasonable couple of any sort would consider all of these things when splitting up.

OP - Take note of the above. When splitting up there is always a lot of concentration on dealing with the home, but there might be other assets to take into account.
Probably less of an issue as you are not married, but still worth keeping in mind.

ian1246

Unless your married, I don't think the OP has any claim whatsoever to partners pension or partners own individual assets, including finances in any accounts in his own name (unless she can prove contribution by herself).

You are legally seperate entities. Marriage is different - you are one and the same.

As for the house - if it's joint tenancy, legally your entitlement is equal. Tenants in common should have a trust & any separation legally would start with that - and any movement away from it would have to be either via mutual agreement or would undoubtedly need an exceptionally strong legal argument to cause a judge to disregard a prior legal agreement which sets out each individuals ownership % of the property...

Op - your ex partners income / future earning potential is probably only relevant in so far as of you have children & will be the main carer (child maintainence). You have no legal entitlement to that income since he is an entirely seperare entity to yourself (unlike in marriage).

 That means unfortunately it probably won't be factored into any split of assets, unless by mutual agreement.

Best bet is an amicable conversation to identify the fairest way to split assets, based upon contributions (deposit, mortgage payments etc...). What the other has in terms of other assets - pensions, savings etc... shouldn't come into it, since they are individually owned, not mutually owned like the house.

That's my understanding of where you would stand - though happy to be corrected if others know better.

Albermarle

ian1246 said:

Unless your married, I don't think the OP has any claim whatsoever to partners pension or partners own individual assets, including finances in any accounts in his own name (unless she can prove contribution by herself).

You are legally seperate entities. Marriage is different - you are one and the same.

As for the house - if it's joint tenancy, legally your entitlement is equal. Tenants in common should have a trust & any separation legally would start with that - and any movement away from it would have to be either via mutual agreement or would undoubtedly need an exceptionally strong legal argument to cause a judge to disregard a prior legal agreement which sets out each individuals ownership % of the property...

Op - your ex partners income / future earning potential is probably only relevant in so far as of you have children & will be the main carer (child maintainence). You have no legal entitlement to that income since he is an entirely seperare entity to yourself (unlike in marriage).

 That means unfortunately it probably won't be factored into any split of assets, unless by mutual agreement.

Best bet is an amicable conversation to identify the fairest way to split assets, based upon contributions (deposit, mortgage payments etc...). What the other has in terms of other assets - pensions, savings etc... shouldn't come into it, since they are individually owned, not mutually owned like the house.

That's my understanding of where you would stand - though happy to be corrected if others know better.

Legally you are correct AIUI.
However depending on what has happened during the relationship, there maybe be some moral obligations to take into account.

EclipseHAP23

DE_612183 said:

EclipseHAP23 said:

Thank you so much. Absolutely agree on credit score - it was more the overall impression left but thanks for your responses. It’s strange, a fair number of friends have split their mortgages when they separated but it clearly isn’t common. Thank you again. Really appreciate it. 

What do you mean by "split" their mortgages?

So sorry for delay on this. Friends (admittedly this was a couple of year ago) told me that they split their mortgage when separating. Quote I found: “Some lenders can even allow the existing mortgage to be split between separating couples, which would enable both to hold on to a share of the mortgage.” From a “This is Money” article written in 2023 (I am not permitted to post links unfortunately). But I can see that porting is far more common. Thanks again for getting back to me. 

EclipseHAP23

Thank you all for the help. Much appreciated at this tricky time. A bit of a “how long is a piece of string” question but worth asking, does anyone have experience with instructing a solicitor as the person being bought out please? I am wondering what a rough estimate of solicitor fees might be. Thank you in advance!