How much do I give my Partner for his share of the house?

moneysavinmonkey

does the deed cover what happens in the event that the relationship ends + one person wants to stay in the house? ?

It would look like he gets 38% of whatever (house value) - (outstanding mortgage) is. I don't think you can minus your 10% deposit from this equation as well - it should already covered by the 38/62 split.

Is that what your boyfriend wants or is he just asking for a profit share? + how is he defining profit?? Need to know what your outstanding mortgage is to know how much you have to give him.

ps: are you sure you are going to be able to raise the extra mortgage needed - presumably when you took out the mortgage it was based on two incomes and now it is only going to be one AND you want to take out more equity?

moneysavinmonkey

house value is £240,000
outstanding mortgage is ?? but no greater than £155,000

so using 155 as the mortgage (you'll have to redo with the actual figure)

£240,000-155,000 = £85,000
38% of £85,000 = £32,500k (his share)
62% of £85,000 = £52,700k (your share)

The 38/62 split seems to take your deposit + your parents contribution more into consideration and then some (should be more around 45/50 for a 10% deposit from one side) so you don't seem hard done by unless there is more to the story.

RabbitMad

Are yopu sure the house's value is £240 (nudge nudge wink wink) Couldn't it be nearer £220 or even £200 with the current down turn?

A friendly estate agent or two might be able to help you here. Agree with you ex 3 estate agents to use to value the house to sell, agree to use the average figure. emphasise to the agent that this is a valuation for a quick sale (and suggest to each agent you'll put the house on the market with them if they value it low) and then knock of hypothetical selling fees and outstanding mortage. Your ex then gets 38% of this figure.

pinkshoes

Where did the £240k valuation come from? You bought for £174k, spent £10k on it, and just 24 months later it's "worth" £240k? That's a 37% increase! Who got the valuation done, him or you? And did you have several done?

jeri0118

Yup, unbelieveably the house is now worth £240,000. It was in a horrendous state when we bought it at bargain price, and our Agent actually wanted to put it on the market now at £265,000 to get around £250,000. We had the house valued by 3 agents and the average value came out at £240K.

I'll be taking out the extra equity to pay off my partner - on top of whats left of the £155,000 mortgage all on my single salary. I will need to rent a room to pay this and things will be tough - hence why I wanted to know if I was doing the right calculations to buy him out. THANKYOU all for your responses! Very helpful.

RabbitMad

Ok so it is worth £240. Remember to take selling fees off this figure eg 1.5% + vat ea fees

beecher

So you'll need to get a mortgage of over £180,000? Have you checked with your bank that this is okay with them, as it is likely to be ahigh salary multiple.

Ian_Griffiths_Halifax

Are there any legal fees, valuation fees, lenders arrangement fees or redemption penalties for doing this transaction? He would need to cover half of these costs as you wouldn't be incurring them if he didn't want his money.

silvercar

your going to need a salary of 45k+ in the present climate to get that sort of mortgage.

jeri0118

Tell me about it. My Financial Advisor says I can do it. I've got some savings (not much, but some) and I'm going to use them up now. The only saving grace is that I'll be taking out 75% mortgage, instead of the 90% one as before. It's horrendous, and I know I'll need to rent rooms to get by, but I'm determined to keep this house.