Joint mortgage, splitting up

ash23

D3PO wrote: »

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 !!!

She owns half the house and half the debt.

If he wishes to buy her out then he has to pay her half the value of the house. In turn she has to pay off the mortgage.

I did state in my OP that unless the bank allow him to take her name off the mortgage he will have to get the full amount together on his own.

I would have thought it was obvious that the old mortgage would be paid off out of that and didn't need to be specified.

In the next post I said

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

to clarify exactly what I meant.

Before calling posts ludicrous you should read them in context.

D3PO

ash23 wrote: »

Before calling posts ludicrous you should read them in context.

Firstly I caled it rediculous not ludacris

secondly you will see I didnt indicate your statement was wrong but rather that if it was correct there would be no logical reason for somebody to go through that process becasue of how financially punitive it would be to them

D3PO wrote:

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

ash23

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 !!

Ahem.

Point is that he DOES have to pay her half of what the house is worth. For the OP, it boils down to the same thing. Lets say the mortgage is 300k. He currently has a mortgage for 150k and she has a mortgage for 150k.
If he buys her out he needs a mortgage of 300k.
For him, he is paying over half the value of the house to her, whatever that may be.

Obviously if she has no interest in the house anymore, she will have to repay the bank her half of the original mortgage.

I was discussing it from the OPS perspective. Not the exs.

D3PO

look I wasnt call you ludacris I was calling the situation ludacris.

Now if you think ive been attacking you your way off the mark. Chill

seamus

ash23 wrote: »

Ahem.

Point is that he DOES have to pay her half of what the house is worth. For the OP, it boils down to the same thing. Lets say the mortgage is 300k. He currently has a mortgage for 150k and she has a mortgage for 150k.
If he buys her out he needs a mortgage of 300k.

Just highlighting that very specific wording above. If the house is worth 200k and they have a mortgage of 300k, he only has to pay her half of what the house is worth - i.e. 100k and extend his mortgage to €250k. She will have come up with the other €50k to be released from her mortgage.

ash23

D3PO wrote:

look I wasnt call you ludacris I was calling the situation ludacris

I never said you were calling me ludicrous.

ash wrote:

Before calling posts ludicrous you should read them in context.

Thats all I said.
I'll leave it at that.

iguana

Putta wrote: »

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.:(

First off you need to re-think how you are phrasing this. House prices have fallen since last year. Unless you bought at a substantial discount the property is worth less than you paid for it. As you bought with a small deposit and you will have made very little capital repayment in one year you are most likely in negative equity.

In this scenario under no circumstances do you "buy her out." If you are to take sole ownership of the property she will have to pay you to take on the full mortgage. She has to buy her way off the debt. Start thinking of it that way, it's important.

This will only be possible if you can get a sole mortgage for the property. If you can't find a bank/building society willing to cover you for the full amount you can't take sole ownership. (Bear in mind you may be charged a higher interest rate in order to be given a loan based only on your income.) Then your options are to stay as joint owners and hope the rent covers the mortgage repayments. Or sell up and find a way that you pay for any shortfall between you.

So to sum up your options are;

1. She buys her way out of the debt and you take sole ownership.
2. You continue to own the property together until some future date when you can change this. (Try your best not to get stuck in this scenario).
3. You put the house on the market, sell it and pay off the shortfall between you.

I recommend the last option. It might cost you a few thousand but you will be free and clear. If you can economise it will only take a few years to clear away the outstanding debt and save up a new deposit. You can start afresh.

iguana

seamus wrote: »

If the house is worth 200k and they have a mortgage of 300k, he only has to pay her half of what the house is worth - i.e. 100k and extend his mortgage to €250k. She will have come up with the other €50k to be released from her mortgage.

In that scenario she wouldn't get €100k but she would have to pay €50k. That's assuming the bank would allow him to take on the mortgage alone. Realistically unless he is on a secure €60kpa (absolute minimum) he won't be getting €250k on a single salary for a 125% mortgage. And he would get such a penal interest rate on that he would be a mug to do it unless she was willing to compensate him further.

Putta

iguana wrote: »

I recommend the last option. It might cost you a few thousand but you will be free and clear. If you can economise it will only take a few years to clear away the outstanding debt and save up a new deposit. You can start afresh.

Thanks, Iguana, this is very likely the option I will go for.

I just want to put things in as much perspective as possible so here are all the numbers!

Origianl mortgage amount 151,256.01
Now 148,719.01 (all paid by me )

Current monthly payment 639.75
Minus TRS 103 = €539

looks like the house is now worth around 142,000.

I can easily afford the mortgage by myself as I have up until now but as I cant live there the only option I would have if I was to buy it would be to rent it. The question is should I take on the neg equity now to save from losing what I have invested already or be shot of the lot at a loss.

It looks like I will be selling asap and very likely for a loss, if at all possible!

The whinge ****er is going on about the furniture now, which she insisted on taking out (in her name alone) a 10,000 euro loan to buy even though anybody who buys a new how scrimps and scraps furniture together. She can **** roight off!:cool:

seamus

In your situation Putta, I would suggest selling the house, you walk away with your €6k negative equity and she can walk away with her furniture & associated loan. Seems like the fairest compromise overall.

Ultimately she did live in the house that you were paying a mortgage on, but you also used the furniture that she borrowed to buy, so IMO it's easier to just walk away with each of your own debts. You can get a personal loan €6k and easily have it paid off in a year or two *and* build up a new savings account while you're at it.

If you decide to stay in the house, then you can offset the cost of the furniture against the negative equity - i.e. Let her walk away from the house if she leaves the furniture in place. Possible messy one that though, it might be easiest to sell up altogether and start again.

Putta

seamus wrote: »

In your situation Putta, I would suggest selling the house, you walk away with your €6k negative equity and she can walk away with her furniture & associated loan. Seems like the fairest compromise overall.

The problem is getting someone to buy the place.

There have been houses for sale in our estae that have been there since we bought last year. Its a small village in Laois!! So I cant see masses turn up to get at it.

I can only hope there is somone out that that wants its.

seamus

Quick sale = cheap price unfortunately. If you pitch it low enough, you should get the interest.

Putta

seamus wrote: »

Quick sale = cheap price unfortunately. If you pitch it low enough, you should get the interest.

This is a long long shot but is there anywhere to see what houses were sold for what in your area.

Even it was to show the house sold but not the price would do. Just to know there selling.

And would having the house furnished encourage or drive away perspective buyers? I was thinking when times were good and first time buyers were getting houses like this. Might help with the sale.

seamus

The daft.ie advanced search allows you to view homes that have recently gone sale agreed.

IIRC the myhome.ie advanced search will also show homes that have been sold. Though EA's tend not to leave them up very long because it costs money (afaik).

People tend to have their own furnishings, but FTBs obviously like to have something there. Perhaps not the whole shooting match, but your kitchen's white goods and maybe a sofa or two in the sitting room. Anything which is already bolted to the wall, such as a flat screen, is usually appreciated because it means you don't have to patch & paint the marks on the wall. Cabinets and desks and the like, not so much.