Fixed mortgage issue

[Martynt74]

Its the same with owing any money to someone if you offer a fair repayment plan unless it puts the other in hardship it should be accepted.

I'd expect immediate (or a short time frame) to be honest. With relationship splits it's generally better to cut ties anyway, but in this case she may need it for a deposit on a smaller property she can afford. I'd have said that if the op can't fund buying her out then the house needs selling with any residual assets split as per the original agreement.

 

[Simon]

OP, remortgage if possible and borrow more to pay her off. If shes moving out to rent for a bit you might be able to get it to a year where ERC will drop to 1%

Well you would have a £400k mortgage on a £500k+ house.

If you can drop half a million plus on a house you should have at least £20k in the bank.

What?

Having £20k spare is gonna mean you take a 80% rather than potential 75% LTV and why would you do this when saving rates are so bad, sure you might want liquidity but a better rate is better long term.

If you had the money to 'drop half a million' on a house then you don't need a mortgage do you.

 

[Usel]

I

Read my post properly next time. NOW wife. We weren't married at the time nor had any plans to be.

I was refering to the NOW pays 100% of the mortgage part.

 

[Usel]

Just been having a read. An unequal share contract also protects you when either they die, disappear or become bankrupt.

So its not just that you didnt trust each other or were not in a serious relationship and then bought a house.

Seems like you'd be stupid not to have a contract or your solicitor wasn't doing their job properly and didnt push for you to have one.

 

[Psycho Sonny]

OP, remortgage if possible and borrow more to pay her off. If shes moving out to rent for a bit you might be able to get it to a year where ERC will drop to 1%


What?

Having £20k spare is gonna mean you take a 80% rather than potential 75% LTV and why would you do this when saving rates are so bad, sure you might want liquidity but a better rate is better long term.

If you had the money to 'drop half a million' on a house then you don't need a mortgage do you.

What happens in 6 months if your roof has a leak or your boiler goes pop, as well as your car failing it's MOT, etc all at the same time.

If you plough absolutely everything into your deposit with no backup. If something unplanned happens you would be done for. Should have went for a cheaper property in that case if a drop in what 0.2% interest rate is going to be hugely beneficial to you over security.

If your worried about interest, on the cash not being in line with inflation. Plough some into shares or gold, etc.

 

[Usel]

What happens in 6 months if your roof has a leak or your boiler goes pop, as well as your car failing it's MOT, etc all at the same time.

If you plough absolutely everything into your deposit with no backup. If something unplanned happens you would be done for. Should have went for a cheaper property in that case if a drop in what 0.2% interest rate is going to be hugely beneficial to you over security.

If your worried about interest, on the cash not being in line with inflation. Plough some into shares or gold, etc.

You just get a loan from a bank or building society or extend your overdraft. Worth the gamble to reduce your mortgage payments.

 

[~Divine~Wind~]

Might be best to get a loan tbh

Depending on the financial side of things with your ex partner not being in the affordability checks it was my understanding that they may even refuse a mortgage and advise you sell the house? Selling up and splitting any profit/debt as needed would be the best way in my eyes

 

[Martynt74]

OP - Have you had the house valued or had a discussion with your ex to see what kind of money she would be owed from the appreciation of the house?

I wouldn't have thought it would have increased much in the last 6 months.


EDIT - Also don't forget to think about legal costs to transfer the deeds into your name.

 

[Manners14]

You split up within 7 months of getting a house? Ouch.

Has the house risen in value since then?

The house is still valued at the same amount as when we bought it.
We had rented together before hand but just grew apart quite quickly when we bought this house, and I'm not one for waiting around and trying to fix something that won't work.
I've spoken to a lawyer and they said without seeing all the details and charging me for their time, they can't make an informed decision, but advised to pay her if I can afford it, remove her from the mortgage (which is a fraction of re-mortgaging) and if I can afford to stay there, carry on and take over the payments.

 

[Manners14]

Also - judgemental comments about my relationship don't really help the matter.
I was just after advice with the mortgage, not relationship advice, I'm doing alright considering the circumstances.

 

[samcat]

but advised to pay her if I can afford it, remove her from the mortgage (which is a fraction of re-mortgaging) and if I can afford to stay there, carry on and take over the payments.

Sounds like good advice.

If house is valued at same as when you bought (and you both agree on this point) it that gives an easier starting point.
Do the maths of how much you have each paid in, including any decorating/work/upgrades (as you will benefit from these if you keep). Be fair, make sure its clear what is what (fully itemised, full amount and % paid.. In excel it would be 4 columns, Item, Full Cost , A share, B share).
At bottom to a total amount then also % split them.. Then you will have an idea of exactly what % you both put into the property.

Work out contents separately (as you will both want/need furniture/tv etc so will want to negotiate on this). Again, itemise and have a figure in mind for anything you bought together that you want to keep.

Figure out how much you would need to pay her to fairly to buy her out. Also work it out for yourself (as she may decide she wants to buy you out with help of family).. Same maths/numbers, just a different total.

Do the maths on costs of finishing mortgage early and selling (early redemption fees, estate agent costs, solicitor costs etc), Selling for x, paying off mortgage and all fees then splitting 66/33% (or however it works out based on both inputs above with decorating/upgrade spending).

This lets you see which often is best (financially) for you (each), and also lets you see how much not coming to an agreement and having to sell and split will cost.. It sometimes is a big gap, so paying her an extra 4-5k might sound a lot, but it might be much cheaper than having to sell.. Gotta spin the numbers!

Approach for a discussion. You may well find she has a counter offer in mind or disagrees on certain points (be prepared to concede. Worst case scenario you are selling.. See above!).
Don't let it turn into a fight, keep it factual and leave emotion at the door (very hard, I know!).

You may need a loan/borrow from family short term to pay her share.. Get a lodger in to help pay that back and help with the bills until everything has settled financially.. Really is a huge help!

Best of luck!

 

[Martynt74]

Superb bit of advice there

 

[Manners14]

Thanks samcat that's really sound advice, the house price has stayed the same so it's easy to work out the sums to go along with it.

All the contents I bought, however In my good nature I have offered her various things to which she has declined, so I offered her some help, be it monetary or sourcing some contents for the house.

I've done all the work in the house which hasn't added value, it's more just getting it to our taste.

She is not in a position financially to take over the house, our options are either I take it over, or we sell.

We still get on really well as friends so we are talking about it all like adults (with the odd blip from her) and I've said I don't want to leave her out of pocket, and I want her to be in a good position to move out and start the next phase of her life, so I've taken out a 0% credit card that will cover her deposit money and hopefully anything else we have paid off on the house, so she gets to walk away with her money to start a new life straight away.

Thanks for the kind wishes.

 

[Orangest]

so I've taken out a 0% credit card that will cover her deposit money and hopefully anything else we have paid off on the house, so she gets to walk away with her money to start a new life straight away.

If you're planning to withdraw the balance as cash to pay her, it won't be at 0%

 

[Deus Ex]

As others have said, lay your financial cards on the table, get the info on mortgages and talk to her, either she will get the cash in installments or get it now with a share of the costs of remortgaging.

 

[Martynt74]

If you're planning to withdraw the balance as cash to pay her, it won't be at 0%

Some cards offer 0% Money Transfers?

http://www.money.co.uk/credit-cards...MI7aiBpbim1QIV6LftCh1WygONEAAYAyAAEgLavPD_BwE

 

[Manners14]

Yeah mine had 3 months for 0% on money transfers so that would work out ok.

 

[HangTime]

All the contents I bought, however In my good nature I have offered her various things to which she has declined, so I offered her some help, be it monetary or sourcing some contents for the house.

At some point you'll need to firm this up into a more formal agreement, as you don't want to to have 'some monetary help' left un-quantified and hanging over you (she may think this gives her carte blanche to fill a new property with luxury furnishings on your dime).

Overall the optimal solution would appear to be buying her out and removing her from the mortgage, you remain in the property and then remortgage at the end of next year. The more complicated equation is figuring out how much you need to pay her for the property, the deposit bit is easy given it hasn't changed value but where her mortgage payments are concerned you need to figure out how much of it was covering interest and how much was capital repayment (i.e. obtain from the lender how much money is still owed compared to original loan amount). Over a period of only 7 months at the start of a mortgage, the latter is probably quite small on a typical 20 year plus mortgage (maybe smaller than she expects if she isn't financially minded).

 

[Simon]

Yeah mine had 3 months for 0% on money transfers so that would work out ok.

Good option too. You can get some really long deals now too

 

[ahar]

Also - judgemental comments about my relationship don't really help the matter.
I was just after advice with the mortgage.

Ah. There's your mistake right there.

Some folks on here can't help themselves. But the advice is usually good so it tends to be the price