I'm after some advice really, my partner & i bought a property together under a joint mortgage in April 2004 and now we have split up. I'm not sure what to do about the house - he wants to stay & keep it and buy out my share. I'm happy with this, but need to make sure i've thought of everything....

Would the money i've paid in so far (equal half & half of mortgage, fees to get house, bills & furniture) be worth anything more - i.e. if the house has increased in value, or would it still just be the same?

Will i lose the money paid out for house fees - surveys etc?

Would there be a charge/fees for changing the joint mortgage to a single one?

Once this is sorted out & his name is soley on the mortgage, can i get another 100% mortgage on my new house (in single name) or have i ruined my chances as i'm not a first buyer?

There must be loads of other things! Any advice would be appreciated, esp. from people who've been in the same boat :)

Sorry to hear that you are in this fix, not a pleasant time for you to be sorting all this out.

You will have to get the house valued, either professionally which will involve paying a valuer, or pretend you are selling it get three estate agents round and see if you can agree on what it's worth. You can see if it's increased in value, theoretically half the increase is yours plus half of what you put down originally.

The fees and such like are up for negotiation and probably argument. The same applies to the furniture bills etc.

Yes there will be a charge to put it all into his name.

You can get a new 100% mortgage in your name providing you meet the usual criteria for earnings etc. You don't have to be a first time buyer to get a 100% mortgage.

Good luck.

I was in the same position as you last year with my partner keeping the house and effectively "buying me out". We weren't married so my advice only applies if you were cohabiting.

We thought it would be straight forward, but it was anything but. For your partner to buy you out they will have to take out a completely different mortgage in their name known as an "equity release mortgage" (or something like that). They will, however, have to earn enough to qualify for the amount borrowed (which proved difficult in our case).

Then there are all the usual fees to take into account, valuations, searches etc etc. In the end, and rather than accepting my full share, I had to accept a reduced amount that my former partner could afford but it still took about 6 months to sort it all out.

To answer your question about the money you've paid in so far. I would suggest that the starting point for the split ought to based upon 50% of the current value of the property less the amount of mortgage outstanding. Then you can think about either splitting the contents, or coming to some agreement on how they should be divided. I don't think bills would really count when you work out your share as these are running expenses and don't really count as an asset.

I think you will lose the money you paid out for house fees - surveys etc, but your former partner will have to pay these again when they take out a new mortgage.

I thought it would simply be a case of changing the joint mortgage to a a single name, but unfortunately it is a lot more complicated than that and there may be a charge/fees for changing it. It depends on the mortgage provider I suppose.

As I found out, once everything is sorted out, you will be able to get a new mortgage in your own name. You will also qualify for any incentivels offered by the mortgage provider such as 1st time buyer discounts etc.

I'm no expert, but speak from recent experience and hope it helps you. It's very stressful, but time is a great healer (so i'm told!). Useful websites I found included:

lawontheweb (http://www.lawontheweb.co.uk/basics/cohabit.htm)

adviceguide (http://www.adviceguide.org.uk/index/family_parent/family/ending_a_relationship.htm#Financial_arrangements_a t_the_end_of_a_r)

divorceguide (http://www.divorceguideuk.co.uk/4_0.htm)

like pete said, treat it as if you were going to sell the house.
Get the valuations, split it down the middle (assumign that initial fee's and everything were also equally split then they can be ignored).
In order to buy you out your ex will need to pay you half of the valuation of the house - half the outstanding mortgage.. Maybe agree to take the middle of 3 valuations in advance, as they are unlikely to agree. Or alternatively the average of 3.

Furniture and other possessions you'll have to work out seperately depending on how you financed them.

I think '1st time buyer' is more of a reference to lack of existing mortgage and chain, so you'll effectively be a 1st tb again.

Oh no, what a mess! I thought it would be fairly simple to change the names on the deeds... sounds depressing now.

Thanks for all your advice & those sites, mrinvestigat, are really useful.

We are not married, and have no children, so at least that makes things slightly easier perhaps. We've been together 5 + 1/2 years, but according to those websites, the length of time together makes no difference.

It would have been good to drawn up a co-habiting agreement - how come the mortgage advisors don't tell you that bit eh?!

completely different mortgage in their name known as an "equity release mortgage" (or something like that). They will, however, have to earn enough to qualify for the amount borrowed (which proved difficult in our case).

Then there are all the usual fees to take into account, valuations, searches etc etc. In the end, and rather than accepting my full share, I had to accept a reduced amount that my former partner could afford but it still took about 6 months to sort it all out.
A different mortgage? So do they have to get the searches & everything done again? Can't they just use the old ones - it's only been a year ish, it can't have changed that much.

To answer your question about the money you've paid in so far. I would suggest that the starting point for the split ought to based upon 50% of the current value of the property less the amount of mortgage outstanding.

So say the mortgage was £90,000 and the amount paid in was at £600 per month divided equally between the 2 of us, erm.. over 15 mths is £9000. So does the mortgage now stand at £81,000 or is it just whatever the £9k paid off - which is more likely most of the interest.

So does he have to pay me £4500?

Thanks for your help, its good to have someone know what they are talking about :)

in the early years of a mortgage you're paying off predominantly interest rather than capital. I think it would be abvisable for you to get a "redemption figure" from your mortgage provider, this figure will be correct "as at" a particular date, but will change by a daily amount that they will probably quote you, so that you can make adjustments to the date that you are going class as teh redmption date of the mortgage.

Hope this helps. Sounds as clear as mud to me!

Yep, like BB said if you've paid £9,000 into your mortgage you will not now owe £81,000.

Repayment mortgages are very "front-end loaded", to use the technical term. What that means is most of what you pay in the early years of the mortgage are the lenders fees and intersest and very little goes off the capital owed.

In fact, I was reading today on a 25 yr mortgage it's something like 40% of the capital (what you owe) is paid off in the last 5 years of it.

So, out of the 9 grand I wouldn't be suprised if at least 8 is "gone" and you still owe nearly all of the £90k.

Sorry to be the bearer of bad tidings :(

I was in your position two and a half years ago, My advice would be to go and see a solicitor. Howells were really good to me - they saw me for a free consultation and that was all it took. Though if things had got tricky i could have gone back.

I had it pointed out to me by the solicitor that there are a few different ways that my Ex and i could have held the house (I'm sorry , she did explain it to me but i cant remember all the terms she used) - this was never explained to us by our solicitor when we bought it so we never actually had a choice. The solicitor when we bought the house just chose what he thought was best and it left me at some what of a disadvantage! Depending on how the house is held determines what you are legaly entitled to in law.

Take copies of any documents you have about the perchase of your house when you go it will help them give you concreate answers.

Originally posted by Saifa
Yep, like BB said if you've paid £9,000 into your mortgage you will not now owe £81,000.

Repayment mortgages are very "front-end loaded", to use the technical term. What that means is most of what you pay in the early years of the mortgage are the lenders fees and intersest and very little goes off the capital owed.

In fact, I was reading today on a 25 yr mortgage it's something like 40% of the capital (what you owe) is paid off in the last 5 years of it.

So, out of the 9 grand I wouldn't be suprised if at least 8 is "gone" and you still owe nearly all of the £90k.

Sorry to be the bearer of bad tidings :(

whilst this is undoubtedly correct, don't forget that in one year the value of your property has probably climbed to 110k.

So you may have about 89k outstanding on the mortgage, but the difference between that and the house value could be (if 110k is correct) 21k, which means you'll be owed 10.5k by your ex.

Hence the advise about getting valuations on the house given earlier.

I'm puzzled by the talk about changing mortgage. There's no reason it shouldn't be possible to stay with the same mortgage assuming that your ex is capable of making the payments and that the lender are happy with that. An equity release mortgage would only be required if he doesn't have the 10.5k to give you and can't get it through a normal loan.

Just a thought....houses tend to sell for more (around 10% in my experience at the moment) than the asking price (ie, more than the valuation price.) You wouldn't know what the house might go for unless it was put on the market and you had genuine offers from people wanting to buy it, although I guess you could try asking estate agents what they think the likely selling price would be.

It seems odd that the valuation figure is so often lower than the selling price, but I guess it just depends how many people are competing to buy each property...

Not wanting to rake up arguments between you and your ex, but it's another point to take into account.

Originally posted by Cyclone
I'm puzzled by the talk about changing mortgage. There's no reason it shouldn't be possible to stay with the same mortgage assuming that your ex is capable of making the payments and that the lender are happy with that. An equity release mortgage would only be required if he doesn't have the 10.5k to give you and can't get it through a normal loan.

My mortgage company (Abbey) wouldn't let us stay with the same mortgage. They effectively said that, to change from a joint to a single mortgage, they would have to close the existing joint mortgage and my ex would have to take a new one out in her name only. Valuations etc had to all be done again because things change, even in a short time. My ex had to get a Solicitor as well to sort out all the things like title-deed changes, and draw up some agreement indemnifying her against any future claims I might make. That was only a few months ago.

I think the best thing to do would be to get some proper independent advice. Maybe CAB could help.

Originally posted by mrinvestigat
My mortgage company (Abbey) wouldn't let us stay with the same mortgage. They effectively said that, to change from a joint to a single mortgage, they would have to close the existing joint mortgage and my ex would have to take a new one out in her name only. Valuations etc had to all be done again because things change, even in a short time. My ex had to get a Solicitor as well to sort out all the things like title-deed changes, and draw up some agreement indemnifying her against any future claims I might make. That was only a few months ago.

I think the best thing to do would be to get some proper independent advice. Maybe CAB could help.

maybe they weren't happy that your ex could service the mortgage on her own. I doubt this is always the case.

Originally posted by SHsheff
Just a thought....houses tend to sell for more (around 10% in my experience at the moment) than the asking price (ie, more than the valuation price.) You wouldn't know what the house might go for unless it was put on the market and you had genuine offers from people wanting to buy it, although I guess you could try asking estate agents what they think the likely selling price would be.

It seems odd that the valuation figure is so often lower than the selling price, but I guess it just depends how many people are competing to buy each property...

Not wanting to rake up arguments between you and your ex, but it's another point to take into account.

that's because the estate agents (or certain ones) under value.

HELLO,

THANKS FOR ALL YOUR REPLIES, IT'S BEEN VERY USEFUL. dam, sorry caps! i've been able to talk to the mortgage company - Northern Rock - and they've been surprisingly helpful... saying that we can change the mortgage from a joint to a single one, for a fee of £265.00, providing credit checks etc are all ok. I presume they mean whether my partner has enough money to cover the mortgage by himself. Is that right?

Howells solicitors - do you have their number please? Do they specialise in mortgage/house dividing legalities? I've been told to find someone who specialises because they would have more knowledge + upto date info...

well loads of people have been giving contradicting advice but all is good to consider.

as a chappy that helps with these matters indirectly - mr investigat is almost spot on.
valuations change, new surveys have to be done.the same as remortgaging for a large sum.the mortgage will then have to start from day one for your partner otherwise they would benefit from the term of the joint mortgage that has allready passed.
you should be eligible for 50% of the increase in value from your initial purchase - unless there are extenuating circumstances such as a 2nd charge or secured loan.

all the best.

Originally posted by willman
as a chappy that helps with these matters indirectly - mr investigat is almost spot on.
valuations change, new surveys have to be done.the same as remortgaging for a large sum.the mortgage will then have to start from day one for your partner otherwise they would benefit from the term of the joint mortgage that has allready passed.
you should be eligible for 50% of the increase in value from your initial purchase - unless there are extenuating circumstances such as a 2nd charge or secured loan.

all the best.

sounds like northern rock disagree.

Hi,

I don't know if Howells solicitor specialise in mortgage/house dividing legalities but they are very big so they probibly have somebody who does. i just found them really helpfull and ofcourse they gave me a free consultation, which is always good!

Their phone number is: 0114 2496666

Good Luck

Originally posted by Cyclone
sounds like northern rock disagree.

that may be the case with Northern Rock but i have yet to find anyone that has achieved the switchover, so i could be wrong.- but as soon as a solicitor is consulted they will defend their own clients rights & usually that includes the number of years or credit benefit achieve whilst operating a mortgage.

i could be wrong but changing a joint mortgage to a single one is in actual fact a new mortgage in a sole name. so they aren't actually transferring the mortgage account.

just checked my conveyance solicitor.

anyhow hope it all goes as well as could be expected.

Originally posted by Cyclone
that's because the estate agents (or certain ones) under value.

True, but any estate agent should be able to indicate the ammount of money you could realise from a house sale (even if it is a vague figure).

Thanks for all your advice. I'll give you an update on the situation... neither of us can afford to buy the other out, because the house has gone up in value, so we are having to put the house up for sale - which is a shame as its a lovely house in a great area.

He wants to transfer the mortgage into his name, and buy a house by himself. This means we don't have to occur the costly cancellation fees from Northern Rock (we've not had mortgage for minimum of 2 years yet)

What happens if the sale falls through or he changes his mind & doesn't want to sell? Then effectively i have just turned the house over to him - by signing the transfer!

I'm going to talk to a solicitor about this, but wanted to know if people had been through this already & if yes, what you did.

why not keep the mortgage as it is until the sale of the house has completed, and then sign it over at the same time as taking half of the proceeds (minus any costs).

Otherwise speaking to a solicitor is a good idea.

Just take i tall