Joint mortgage, splitting up

Putta

Hi all,
Just want to know what to expect when we go about sorting out the mortgage?

We haven't decided whether we're just going to try and sell it or if one of us is going to take over the whole thing.

If I decide to "buy her out" how would we calculate how much she is owed.

From my understanding we would need to get the house valued again and if it is worth more than when we first bought it she would be entitled to half?

On top of that then, would the deposit for the mortgage come into it, is she entitled to her deposit back?

Also, I have been the person paying the mortgage, ESB, Sky, Broadband, Health insurance, House insurance etc, whole she pays the furniture loan and bins
Am I entitled to bring that up or is it just the mortgage and only the mortgage that should be considered?

I guess when we get down to we are both going to have to go to solicitors and pay them a fortune to sort this out or is there another option?

Thanks for any help.

ash23

Putta wrote: »

Hi all,
Just want to know what to expect when we go about sorting out the mortgage?

We haven't decided whether we're just going to try and sell it or if one of us is going to take over the whole thing.

If I decide to "buy her out" how would we calculate how much she is owed.

From my understanding we would need to get the house valued again and if it is worth more than when we first bought it she would be entitled to half?

On top of that then, would the deposit for the mortgage come into it, is she entitled to her deposit back?

Also, I have been the person paying the mortgage, ESB, Sky, Broadband, Health insurance, House insurance etc, whole she pays the furniture loan and bins
Am I entitled to bring that up or is it just the mortgage and only the mortgage that should be considered?

I guess when we get down to we are both going to have to go to solicitors and pay them a fortune to sort this out or is there another option?

Thanks for any help.

Were you married? Are there kids?

In my own experience I wasn't married.

We had 2 options. One of us buy the other out. Or we sell.

What has to be paid is whatever the house is valued at unless you can come to an agreement that one party removes their name from the mortgage (this will need to also be agreed with the mortgage provider).

If the house was bought for 300k and the mortgage is 200k and you want to buy her out, you have to pay her 150k. She is entitled to half the value of the house, regardless of the mortgage or the deposit. If the house is worth 150k you can buy her out for 75k, again regardless of the mortgage though she might not agree to that.
It doesn't matter who paid for what etc.
As far as the law is concerned, you both own the house equally.

If you cannot agree who will buy out who, then it may end up in court and a sale can be forced.

Best for all concerned if you can do it all amicably, especially as it will cut right down on legal costs. Perhaps try mediation.

Putta

ash23 wrote: »

Were you married? Are there kids?
If the house was bought for 300k and the mortgage is 200k and you want to buy her out, you have to pay her 150k. She is entitled to half the value of the house, regardless of the mortgage or the deposit. If the house is worth 150k you can buy her out for 75k, again regardless of the mortgage though she might not agree to that.

You cannot be serious :eek:

We are literally only in the house a year when she decided she wasn't happy.

And your telling me that even though she put in 10k for a deposit and nothing else to pay the mortgage she would be entitled to half the value of the house (75k) if I wanted to buy her out?

Surly this is only trough if the house was sold she would be entitled to half of any profit?


i'm sorry but you have to be wrong on this one!?!?!?!

No kids, not married.

ash23

Putta wrote: »

You cannot be serious :eek:

We are literally only in the house a year when she decided she wasn't happy.

And your telling me that even though she put in 10k for a deposit and nothing else to pay the mortgage she would be entitled to half the value of the house (75k) if I wanted to buy her out?

i'm sorry but you have to be wrong on this one!?!?!?!

No kids, not married.

No, not wrong. She owns half the house. You and her are not married therefore are no more involved than 2 investors who own a property. If the property has increased in value since you both bought, she is as entitled as you are to the equity in the house.

Her name is on the deeds yes?

If you chose to allow her to not pay anything off the mortgage, well, thats a hard lesson learned for you. But as the law stands, if you want to buy her out, you have to pay half what the house is valued at.

If you sold it, you'd have to pay off the mortgage and split the proceeds.

Putta

ash23 wrote: »

No, not wrong. She owns half the house. You and her are not married therefore are no more involved than 2 investors who own a property. If the property has increased in value since you both bought, she is as entitled as you are to the equity in the house.

Her name is on the deeds yes?

If you chose to allow her to not pay anything off the mortgage, well, thats a hard lesson learned for you. But as the law stands, if you want to buy her out, you have to pay half what the house is valued at.

If you sold it, you'd have to pay off the mortgage and split the proceeds.

That's madness! :eek:

I just can't understand how this could be possible.

This doesn't have to be the case if both parties agree to a lesser sum?

Blanchguy

Well if the previous poster is correct, just tell your ex she owes you 75k and hit the road.

seamus

ash has it mostly right there for 99% of cases.

When you bought the house you may have done some "odd" things which would affect the outcome:

- If either party put up a signifcantly larger portion of the deposit and this was noted in one document or other, then that party may be able to claim the full value of that deposit back. However, usually what happens is that all of the deposits are chopped in half.

- If you weren't married at the time of the sale, your solicitor should have advised you to sign the deeds/papers as "tenants in common". This would mean that you both own a specific % of the house and either "tenant" would be entitled to sell their share on without the consent of the other. However, most people sign as "Joint Tenants" which means that neither can sell without the other's agreement and everything is effectively split 50-50.

To figure out how much each person is due, imagine that you (the couple) are selling the house to yourself (the individual).

So imagine that the house will be bought at €300k and you currently have a mortgage of €200k. Each person out of the couple will then take €50k each from the sale. The person buying the house (you) needs to provide €300k. So your new mortgage is the full original mortgage plus the profit that your ex-partner is entitled to from the sale - in this case €250k.

Now, this has been turned onto its head somewhat in recent years with negative equity. However the sums are identical if you allow negatives:
Let's say the house is worth €200k and you have a mortgage of €300k. When you sell the house, each person comes out with -€50k. Your new mortgage now becomes the full original mortgage (€300k) plus the profit that your ex is entitled to from the sale (negative €50k), so your new mortgage is €250k and your ex must pay you €50k to hand over the property to you.

It sounds wrong, but when you think about it, if the property is in negative equity, each partner is equally liable for the losses as they were entitled to the profits.

Edit: Just to update - Putta you're probably forgetting about the mortgage. Yes, she's "entitled" to €75k, but she is also liable for half the mortgage; you can give her €75k but she *must* pay off her half of the mortgage. She effectively transfers her half of the mortgage into your name and she walks away with nothing. Unless you're in negative equity, in which case she must pay you the difference.

ash23

Putta wrote: »

That's madness! :eek:

I just can't understand how this could be possible.

This doesn't have to be the case if both parties agree to a lesser sum?

I'm not sure. You would need to be able to get a mortgage for the current balance yourself. And then offer her a sum of money.
If she agrees to sign away her half of the house for a lesser sum, I'd imagine it's do-able. But then, why would she really.

My house is up for sale. I don't live there. My ex does and he pays the mortgage. If it sells I will expect half of any profit.

Putta

Blanchguy wrote: »

Well if the previous poster is correct, just tell your ex she owes you 75k and hit the road.

Ha ha ha Fact, it would be some profit!

But we are trying to do this as friendly as possible. so the only option (if this is set in stone) would be to sell. Simply as that.

She cannot afford the mortgage herself and there no ****ing way i'm handing that kinda money for nothing.

I would rather sell and be in neg equity that that.

alibaba12

hi, I worked in a solictors a long time ago and there was a law at the time (not sure if it still applies) that if a person moved in with you and no matter how much decoration they did or bills (apart from mortgage) they paid they werent entitled to claim a stake in your property. That being said you signed the mortgage together. You would need to be able to prove she gave you no money for the mortgage (other bills that you or you gf paid for dont count).

The only other thing is if the house is worth 100k less than you paid for it you will need to get a mortgage to cover your stake in the new valued amount as well as pay back the original valued amount to make up the shortfall, if that makes sense

You need to get legal advice from a solicitor.

Blanchguy

Just be aware that if you do sell for less than the mortgage you still owe the bank the difference - both of you are responsible for all this money. The interest rate on it will go up as the bank now has no security.

Putta

Thanks Seamus, So even though I would have borrow 75k to get the mortgage into my name, she would still have to put that 75k back into the mortgage to pay her half.

Which just sounds stupid?!?!?

Its just getting money from the bank to give to her to give back to the bank.

I ll have to ask the solicitor of course but surely if she agreed to a smaller sum we could avoid all that crap.

seamus

Putta wrote: »

But we are trying to do this as friendly as possible. so the only option (if this is set in stone) would be to sell. Simply as that.

She cannot afford the mortgage herself and there no ****ing way i'm handing that kinda money for nothing.

These two are a little bit at odds. If you want to do it the easy way, then you split everything in half. If you only want to give her back her deposit, then you will need to get her to agree to that or take her to court to show that you were the only person paying the mortgage.

But before you do anything, do your sums. You bought a year ago. Unless you stumped up a huge deposit, then you're in negative equity. In which case she must give you half of the loss that the property has sustained in order to buy out of the mortgage. Of course, the reverse on the mortgage payment is true - she can take you to court to show that only you were paying the mortgage and therefore the loss is all yours (except for her deposit).

seamus

Putta wrote: »

Thanks Seamus, So even though I would have borrow 75k to get the mortgage into my name, she would still have to put that 75k back into the mortgage to pay her half.

Which just sounds stupid?!?!?

Its just getting money from the bank to give to her to give back to the bank.

Yep. That's the way it works. In reality she will never see that €75k. The agreement will be done on paper and the movement of money is done behind the scenes by the bank(s).

Paulw

Putta wrote: »

That's madness! :eek:

I just can't understand how this could be possible.

This doesn't have to be the case if both parties agree to a lesser sum?

I don't mean to sound bad, but did you not discuss things like this with your solicitor before you bought? :eek:

I bought my apt by myself, but when my gf and I discussed moving in together, I did consult my solicitor to get details of what possible situation could arise if we broke up. Thankfully, we didn't break up (we got married).

But, situations like yours are not uncommon at all, and like you, many people learned some very hard lessons.

Putta

Paulw wrote: »

I don't mean to sound bad, but did you not discuss things like this with your solicitor before you bought? :eek:

I bought my apt by myself, but when my gf and I discussed moving in together, I did consult my solicitor to get details of what possible situation could arise if we broke up. Thankfully, we didn't break up (we got married).

But, situations like yours are not uncommon at all, and like you, many people learned some very hard lessons.

Ah, no! I wasnt going to lean across the table in front of the GF and ask the solicitor what happens next year when this one decides she wants out

Thanks lads, you have cleared up a lot for me. I just misunderstood at first how it all worked.

Simply fact is there is no way she can afford to buy me out so its either I do or we sell.

selling will take a long time as there has been 4 other houses in our area on sale for 2 years and are still there.

The worst thing is I never saw it coming. hell we did nothing but talk about spending the next 10 years in the house and SLAP! Wakey wakey!

Oh, ye of experience, how much (ball park) did the solicitors fees cost ya?

ash23

OP, is the house in negative equity?

I'm confused by whether or not you are talking profit or loss if the house sells.

Our house is still up for sale as neither of us could afford to buy the other out.
But when we bought we paid 1.5% of the value of the house for solicitors fees. It worked out at about 3k at the time.

The worst thing is I never saw it coming. hell we did nothing but talk about spending the next 10 years in the house and SLAP! Wakey wakey!

Lol, none of us ever do. It's a crap hand to be dealt but live and learn.

Putta

ash23 wrote: »

OP, is the house in negative equity?

I'm confused by whether or not you are talking profit or loss if the house sells.

Our house is still up for sale as neither of us could afford to buy the other out.
But when we bought we paid 1.5% of the value of the house for solicitors fees. It worked out at about 3k at the time.

Sorry Ash23,
It was bought last July for 151,000 euro and + 10,000 deposit.

I do not know what the current value of the house is so I couldn't tell you if it is in positive or negative equity!

Paulw

Putta wrote: »

Ah, no! I wasnt going to lean across the table in front of the GF and ask the solicitor what happens next year when this one decides she wants out

I didn't mean it quite like that, but I certainly would have had a quiet (private) word with the solicitor, just in case.

Clearly no one plans a split, but these things do happen, all too often.

Anyway, hopefully you'll be able to come to a proper agreement, and you're not both in too much debt.

Putta

Paulw wrote: »

I didn't mean it quite like that, but I certainly would have had a quiet (private) word with the solicitor, just in case.

Clearly no one plans a split, but these things do happen, all too often.

Anyway, hopefully you'll be able to come to a proper agreement, and you're not both in too much debt.

Thanks mate, it is a valuable lesson learned and probably a costly one.

ash23

Putta wrote: »

Sorry Ash23,
It was bought last July for 151,000 euro and + 10,000 deposit.

I do not know what the current value of the house is so I couldn't tell you if it is in positive or negative equity!

Ah ok. Well, thats the first step then, get it valued and go from there.
If it's in negative equity and you can get a mortgage for the full existing mortgage, she might be happy enough to walk away.

If I could walk away from my house (without debt) I'd grab that with both hands.

professore

In fairness to him, my solicitor always points out stuff like this, e.g. "if you agree this and X happens, then Y will get all the money - are you happy with this" kind of thing.

Simon201

Interesting thread...

Anyhow Putta, the present climate could work in your favour in some way. Your house is now valued at around €145000 according to the Permanent TSB house price calculator....

Putta

Simon201 wrote: »

Interesting thread...

Anyhow Putta, the present climate could work in your favour in some way. Your house is now valued at around €145000 according to the Permanent TSB house price calculator....

Good to know, thanks Simon.

dan_d

Ehhh, can I throw a spanner in the works?

I know a couple, he bought the house, and she moved in with him and paid rent. It was obvious fairly early on that things were going sour, but when they did eventually - she obviously wasn't entitled to anything out of the mortgage, but she brought him to court and sued him for all the money she felt she had invested in decorating and furnishing the house. (about 15k)

Needless to say, they don't talk/see each other anymore.....

Careful of that one OP. And to be fair, your solicitor should have asked you that question, rather than it being you bringing it up...I know we were asked it, even found the paperwork the other day.

Putta

Ok, so being talking this out and she wont be able to buy the house herself.
what she wants to do is share the house while not paying for anything :rolleyes:

So, here's the grown up question. In these uncertain times would it be un wise of me to buy her out?

Pros: It would be an investment
Its in m home village where I am hoping to get back to asap.
I would not loose the money I have invested.
If I can rent it it would pay for itself until I do get home.

Cons:I m left with a house I cant live in.:mad:
I would have to go through the mortgage application process again.
The way this country is going and mortgages rates the mortgage rate could go way up.

The only other option I can see is for both of us to move out of it and try to rent it while we try to sell it.

So what would u do?

liger

Been there and done that mate. Its not a nice situation but if you can get it sorted while still on good terms with her i'd say get rid of it now.

Lets say you keep it as it now, rent it for a couple of years. Suddenly she changes her mind, decides she wants to keep it even though she cant afford, you'll have to go thru the courts to get an order of sale, pay the solicitors 10 - 20k for the trouble and if as widely predicted house prices continue to drop you'll be in neg equity and be at the mercy of the banks as to wheter they'll give her and you the money to clear it.

These things can turn nasty in a heartbeat, if your making an agreement with her, do it with solicitors involved and always put it in writing.

I learned the hard way, the expensive way and the long way. 4years+ of my life wasted on it, 20k in legal fees and 15k to clear the neg equity.

Sell sell sell sell you mad fool!!!!!

D3PO

if the house is in neg equity she should pay you half of the neg equity to get out.

If the house has equity in it you should pay her half of the equity to get hout.

That should be what your looking at, in terms of a negotiation point.

Ash's first post is ludacris that you have to pay her half of the houses worth. That would only apply if there was no mortgage. She owns half the house but she also owns half the debt. Ash seems to have forgotten the second component of that equation !!

D3PO

ash23 wrote: »

If the house was bought for 300k and the mortgage is 200k and you want to buy her out, you have to pay her 150k.

She is entitled to half the value of the house, regardless of the mortgage or the deposit. If the house is worth 150k you can buy her out for 75k, again regardless of the mortgage though she might not agree to that.
.

Thats rediculous. (Not saying its wrong but why int he hell would anybody agree to this if it is the case.)

In point one. She should be entitled to half the equity but also half the debt.

So 150k (equity) minus 100k (debt) = 50k payoff

In point 2 assuming same mortgage amount of 200k

Shes entitled to 75k (equity) minus 100k (debt) = she should pay 25k to be released from the mortgage.

Again not saying thats legally the case but logically anything else is a joke. Otherwise everybody would want to be the party being bought out !!!

Putta

D3PO wrote: »

if the house is in neg equity she should pay you half of the neg equity to get out.

If the house has equity in it you should pay her half of the equity to get hout.

That should be what your looking at, in terms of a negotiation point.

Ash's first post is ludacris that you have to pay her half of the houses worth. That would only apply if there was no mortgage. She owns half the house but she also owns half the debt. Ash seems to have forgotten the second component of that equation !!

Ah this was all worked out further down the thread.

Yeah cut the **** outta me that I would have to give the leech more money.

I'm down to 3 options now.
Buy her out hope to rent it until someone can buy it.
Buy her out hope to rent it until I get to move down there.:(
Leave in both our names until it can be sold. Rent it if possible in the mean time.:(

Or find doc brown go back in time and bitch slap past me for being so gulable! :mad: I think I could take him!

D3PO

Putta wrote: »

Ah this was all worked out further down the thread.

Yeah cut the **** outta me that I would have to give the leech more money.
!

sorry got to lazy to read the full thread