Being bought out of mortgage by ex - maths Qs

jamint · 8 August 2018 at 10:01AM

Hi all, I have a simple "being bought out" question that I just wanted clarification on.

My ex-gf and I own a house. We both equally paid in £20k deposit each (so £40k deposit total). We bought it 5 years ago for £185k, it is now worth £280k. We have £135k left to pay on the mortgage. We spoke and agreed to 50/50 everything.

Therefore my sums were: 280-135 = 145 divided by 2 = 72.5k.

Last night she messaged and offered £60k to buy me out. This is obviously lower than I have worked out below. Am I correct in my sums / is there anything else 'standard' that I might have forgotten to include in my calcs?

Also, in the event I am bought out - will I need to solicitor to do this at my end? As far as I am aware she will need a solicitor and I will have forms to sign, but it's unclear if I will need one at all. Obviously this is the first time I have done any of this.

Many thanks

foxy-stoat · 8 August 2018 at 10:26AM

Is that £72.5K and it has to be sold? So 72.5K less selling fees or was she going to keep the house.

It may be that she cannot get the £72.5K on the mortgage and it will have to be sold, so you both may not end up with 72.5K at the end.

I would say £65K and you will sign the transfer of equity form - you dont NEED a solicitor but she will appoint one if she is keeping the house - her solicitor should of told her to tell you that you should take legal advice for this transaction but not 100% necessary - as long as it is agreed that you will get X amount in the agreement that you sign the transfer of equity.

jamint · 8 August 2018 at 10:29AM

Sorry - should have clarified, she is looking to buy me out of my half of the mortgage and then move into the house (I am there currently, she is living with her partner elsewhere at the moment). She has confirmed she will be able to afford the mortgage, the negotiation is how much she pays me up front to buy me out.

Thrugelmir · 8 August 2018 at 10:30AM

How realistic is your property valuation?

In any event I'd decline and simply say too low. As it's you that's going to incur the expense of buying a new property. Every £k matters.

silvercar · 8 August 2018 at 10:38AM

If you can't reach agreement then the property would need to be sold. This would incur legal costs, estate agent fees and a delay of a few months. Her calculation is possibly based on an allowance for the costs that you would otherwise be incurring, coupled with a realistic price that could be achieved, together with an element for the fact you would get the money months earlier than a sale and would not have to pay rent elsewhere while you wait for a sale.

getmore4less · 8 August 2018 at 11:56AM

Costs are not £25k

even £10k to sell a £280k place would be generous

could be done for £5k, that leaves £70k on the table to take away, £60k is well low even for an easy exit.

The simple "I think it is worth more" is to offer £61k to buy her out.

sheepy21 · 8 August 2018 at 1:32PM

For an easy life I'd meet in the middle at 66k, as other have said if you can't agree and have to sell, there's a whole load of expenses, stress and delays. So for me, taking a bit less would be worth a straightforward transaction.

jamint · 8 August 2018 at 2:17PM

Thanks for all your thoughts and opinions.

She is apparently coming from a POV that she's entitled to more because at a certain point of ownership she paid a greater contribution to the mortgage (even though I was paying the bills/council tax and that is how we decided to divide it at the time, so I don't believe that's a valid argument). She also thinks that because she moved out it was considerate of me and made it a lot easier for myself (maybe true to an extent but I think she's overlooking how this suited her too at that time).

In any case we've been messaging today so I'm hopeful a compromise value somewhere in between the two values (more towards the 50/50 value) will be agreed.

foxy-stoat · 8 August 2018 at 2:27PM

Unless a Declaration of Trust says otherwise you both own either 100% of the property if you a joint tenants or tenants in common with the set shared percentages.

You are both jointly liable for the debt so neither one of you is entitled to more than 50% of the equity unless you both agree.

getmore4less · 8 August 2018 at 2:29PM

How long have they been moved out?
Are they still paying?

jamint · 8 August 2018 at 2:55PM

@foxystoat We jointly own the property, with no declaration of trust, etc. The agreements we had at the time regarding mortgage/bills were reflective of my wage at the time, which she was fine with and was happy to suggest so that we both had a life. It's only now she's flagging this up as evidence of her "considerable contributions to the mortgage" and somehow this equating to her deserving more from the sale as a result. Which I naturally strongly disagree with.

@getmore4less her and her boyfriend have never lived in the house, they've been privately renting whilst she'd continued to pay half the mortgage.

Being bought out of mortgage by ex - maths Qs

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