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Buying ex out of house

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    #32
    Marcusm
    Registered Users Posts: 10,328 ✭✭✭✭Marcusm


    The_Conductor wrote: »
    Or- the LTV of the mortgage at the outset was in the (perhaps) 70 to 80% range (aka there was equity put into the property, aside from the mortgage, at the outset.

    You mean the manner sensible mortgages were and continue to be advanced!


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    #33
    Aineoil
    Registered Users Posts: 1,358 ✭✭✭Aineoil


    Just know a friend who did this last year - expensive business


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    #34
    phormium
    Registered Users Posts: 3,340 ✭✭✭phormium


    IF you do not need to borrow more to pay ex off and IF you qualify for a loan of the amount you have with your lender and IF your lender was willing they could just remove the other party's name from the mortgage with no loss of tracker. It can be done however obviously banks don't want to as they see it as a way of getting rid of a tracker by making you apply for a new loan but it's worth a fight IF you fit all the other criteria.


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    #35
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    phormium wrote: »
    IF you do not need to borrow more to pay ex off and IF you qualify for a loan of the amount you have with your lender and IF your lender was willing they could just remove the other party's name from the mortgage with no loss of tracker. It can be done however obviously banks don't want to as they see it as a way of getting rid of a tracker by making you apply for a new loan but it's worth a fight IF you fit all the other criteria.

    He'd also need her name removed from the ownership of the property- its not just removing her name from the mortgage- its also removing her name as an owner of the property- which is a separate matter altogether.


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    #36
    phormium
    Registered Users Posts: 3,340 ✭✭✭phormium


    Removing her name from the title will be a minor detail if he gets the bank approval to take her off the mortgage, it's the name on the mortgage that is the stumbling block in cases like this. The bank would probably allow her name to be taken off the deeds no problem, they are not as bothered about who owns the house, more about who is liable for the mortgage!


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    #37
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    phormium wrote: »
    Removing her name from the title will be a minor detail if he gets the bank approval to take her off the mortgage, it's the name on the mortgage that is the stumbling block in cases like this. The bank would probably allow her name to be taken off the deeds no problem, they are not as bothered about who owns the house, more about who is liable for the mortgage!

    Minor detail?
    Errr- no, its not.
    It requires legal work and a registration of the amended deeds etc.
    Depending on whether the bank do it in house of whether an external solicitor is used- it can be anything up to over a grand of work (at very least if its all straightforward, its about 400).

    Certainly the banks main concern is that the mortgage is repaid- however the OP is going to have to satisfy proper mortgage checks- that were not necessarily followed during the boom years. If he doesn't meet the lending criteria- the bank can insist on leaving his ex on the mortgage- and legally liable for the mortgage- in case the OP for whatever reason, defaults on the mortgage (and totally irrespective of whether he is the only person paying it or not).

    Getting her removed from the mortgage- is not straight forward- it provides the bank with comfort- the knowledge that they have someone else liable for the debt. Even if the OP does qualify for the mortgage on his own- the lending institution will probably charge a higher rate of interest- as he is on his own, and considered a higher risk. Its all about risk- and how likely the bank is to be repaid- and if there is an issue- whether there is someone else they can chase to make it good, or not............


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    #38
    Marcusm
    Registered Users Posts: 10,328 ✭✭✭✭Marcusm


    phormium wrote: »
    Removing her name from the title will be a minor detail if he gets the bank approval to take her off the mortgage, it's the name on the mortgage that is the stumbling block in cases like this. The bank would probably allow her name to be taken off the deeds no problem, they are not as bothered about who owns the house, more about who is liable for the mortgage!



    In reality, the lending institution would insist on the ex giving up any ownership interest (ie transferring her interest) as they would not be willing to have a claim against the title complicated by an owner who is not responsible or the mortgage.


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    #39
    Peanut2011
    Registered Users Posts: 1,001 ✭✭✭Peanut2011


    Marcusm wrote: »

    In due course (maybe a year or so), I imagine that you would approach the lending institution establishing that you have been paying the mortgage solo and that you have the beneficial interest in the property and asking them to permit the transfer to be effected without losing the tracker.

    Legal advice, legal advice, legal advice is what you should seek.

    As I mentioned before and it is from first hand experience, no Bank will just simply change the Mortgage no matter if you can prove you were the only one paying the mortgage for months / years......

    They will want to re-asses you as a new applicant based on the lending criteria at the moment. Basically they can refuse your for the mortgage.

    Doing any other deals, indemnities and so on will be problematic. If his ex decides to buy other property, apply for the loan and so on, she will have the mortgage still registered in her name and will have difficulties.

    Furthermore, if for whatever reason OP defaults on the payments they will pursue both of them.

    Also one thing to consider is that the ex would inherit all of the property should anything happen to the OP as she is still on the title.

    In any case, do speak to solicitor and get the exact legal requirements and pro's and con's!

    But before you do that and end up paying for the legal fees without knowing what you can do, speak to your bank.


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    #40
    phormium
    Registered Users Posts: 3,340 ✭✭✭phormium


    I mean a minor issue in the way that it will be easy to get permission and agreement to do it, obviously you can't just scribble out the name on the deeds, of course it has to be done legally and will incur a cost but if the OP had got to that stage I am sure they will quite happy to be paying for that work. The real hurdle will be getting the mortgage in their own name, not the ownership issue, that is just paperwork. This all hinges on whether or not the bank's underwriting criteria will approve the amount of the mortgage in sole name, find that out first.

    Banks are perfectly able to remove one name from a mortgage without setting up a whole new mortgage, they just don't want, especially if it means they can get rid of a tracker. However some people have managed it, there was a case lately on Askaboutmoney.com where the poster had managed it.

    It was commonplace before the banking disaster and I can assure is still being done for example where one holder dies, the system is there, the willingness is not!

    Here you are, found the case http://www.askaboutmoney.com/showthread.php?t=143959


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    #41
    Barr
    Registered Users Posts: 7,010 ✭✭✭Barr


    The_Conductor wrote: »
    OP- how do you reckon that the property isn't in negative equity if you bought it 8 years ago? Did you have a low loan to equity ratio on the mortgage (aka did you part finance the purchase with cash/savings). Its a bit of a stretch of the imagination that it isn't in NE if you bought it 8 years ago.

    How did you come up with a mutually agreeable price for the property with your ex? Does it have any basis in the actual recent sale prices of similar property in the vicinity- or is it something that you came up with between you?

    Personally- given the limited information given, I would be of the opinion that your ex would owe you money- considering the fall in the value of the property- and the additional cost associated with it (property tax, the fact that you'd be loosing the tracker mortgage etc etc etc)

    I'm not sure that you've thought this through properly.


    We were lucky enough to get a house through the affordable housing scheme in a good area. There was a sizable chunk taken off the price at the purchase time.

    Having seen the sale agreed prices in our area versus the amount left in the mortgage the house has equity in it. Very fortunate really given the time we bought.

    With regards to the amount agreed to compensate my ex. What she basically wants is to be repaid her outlay i.e any payments to date including her share of the mortgage which she has paid.

    We both are married at this stage (to other people of course :D). I have lived there with my family for the past 3 years. My ex returned home and is now living back in Italy.

    I suppose it is a complicated situation. My ex does not want to be tied to a house in Ireland and just wants the cash. I don’t want to loose the tracker and get screwed by the bank.


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    #42
    Peanut2011
    Registered Users Posts: 1,001 ✭✭✭Peanut2011


    Barr wrote: »
    My ex does not want to be tied to a house in Ireland and just wants the cash. I don’t want to loose the tracker and get screwed by the bank.

    Unfortunately both of you will not be able to get what you want in this case! Either her name will stay on the papers or you will lose the tracker mortgage.

    That is the bottom line.


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    #43
    Godge
    Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    Barr wrote: »
    We were lucky enough to get a house through the affordable housing scheme in a good area. There was a sizable chunk taken off the price at the purchase time.

    Having seen the sale agreed prices in our area versus the amount left in the mortgage the house has equity in it. Very fortunate really given the time we bought.

    With regards to the amount agreed to compensate my ex. What she basically wants is to be repaid her outlay i.e any payments to date including her share of the mortgage which she has paid.

    We both are married at this stage (to other people of course :D). I have lived there with my family for the past 3 years. My ex returned home and is now living back in Italy.

    I suppose it is a complicated situation. My ex does not want to be tied to a house in Ireland and just wants the cash. I don’t want to loose the tracker and get screwed by the bank.

    Which affordable housing scheme?

    If your ex is selling her interest in the house to you, she may be liable for the clawback, in fact that sale may trigger the clawback for both of you.

    http://www.citizensinformation.ie/en/housing/owning_a_home/help_with_buying_a_home/affordable_housing.html

    "f you sell your house within 20 years, you will have to pay the local authority a percentage of the proceeds of the sale - known as 'clawback'. This percentage is expressed as the percentage difference between the sale price and the market value of the house. This amount will be reduced by 10% each year after you have owned your home for 10 years. So, if you sell your home after 20 years, you will not have to pay any clawback to the local authority.

    The market value at the time of selling your affordable home is used to calculate the amount of clawback due to the local authority. If the gap between the original sale price and market value has narrowed, the amount due to the local authority will also reduce. If the proceeds of the sale of your affordable home are below the initial price actually paid, you will not be liable to pay the local authority a percentage of the proceeds of the sale."


    You really need legal advice on this.


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    #44
    Barr
    Registered Users Posts: 7,010 ✭✭✭Barr


    Godge wrote: »
    Which affordable housing scheme?

    If your ex is selling her interest in the house to you, she may be liable for the clawback, in fact that sale may trigger the clawback for both of you.

    http://www.citizensinformation.ie/en/housing/owning_a_home/help_with_buying_a_home/affordable_housing.html

    "f you sell your house within 20 years, you will have to pay the local authority a percentage of the proceeds of the sale - known as 'clawback'. This percentage is expressed as the percentage difference between the sale price and the market value of the house. This amount will be reduced by 10% each year after you have owned your home for 10 years. So, if you sell your home after 20 years, you will not have to pay any clawback to the local authority.

    The market value at the time of selling your affordable home is used to calculate the amount of clawback due to the local authority. If the gap between the original sale price and market value has narrowed, the amount due to the local authority will also reduce. If the proceeds of the sale of your affordable home are below the initial price actually paid, you will not be liable to pay the local authority a percentage of the proceeds of the sale."


    You really need legal advice on this.

    The claw back is there if we intended on selling. I plan on living there :)

    Although from talking to others, it appears since the crash the local authorities have no issue with selling affordable houses. They don't seem to be enforcing the claw back either as the values has fallen considerably.


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    #45
    Barr
    Registered Users Posts: 7,010 ✭✭✭Barr


    Godge wrote: »
    You really need legal advice on this.

    If anyone could recommend a solicitor that they used with a similar scenario to mine I would appreciate it( pehaps by pm). Any legal agreement will have to be water tight to protect both our interests so would like to get someone who knows what they are doing.


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    #46
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Barr wrote: »
    We were lucky enough to get a house through the affordable housing scheme in a good area. There was a sizable chunk taken off the price at the purchase time.

    Ensure you comply with the rules of the Affordable Housing Scheme- and clarify this in advance- you do not want to end up owing a massive clawback to the council. One of the joint purchasers selling their stake in the property- is akin to the whole property being sold.
    Barr wrote: »
    Having seen the sale agreed prices in our area versus the amount left in the mortgage the house has equity in it. Very fortunate really given the time we bought.

    Very fortunate indeed. But for the fact that it was under the Affordable scheme- you'd be up the proverbial creek.
    Barr wrote: »
    With regards to the amount agreed to compensate my ex. What she basically wants is to be repaid her outlay i.e any payments to date including her share of the mortgage which she has paid.

    She might have a reasonable request for her deposit back- alongside half the principle that has been paid of the mortgage (not her share of the mortgage- at the outset the bulk of mortgage payments are interest payments- not payments off the principle. She has no right to seek her mortgage payments back- half the amount paid off the principle, up to the date when she last paid half the mortgage, on the other hand, sounds fair).
    Barr wrote: »
    We both are married at this stage (to other people of course :D). I have lived there with my family for the past 3 years. My ex returned home and is now living back in Italy.

    You need to get this sorted. Aside from anything else- your wife and indeed her husband- both have a financial interest in the property. This could well be a lot messier than you imagine. Both of you getting married to different people- has introduced 2 new people into the equation, with legal claims on the property.......... You need good advice on this- simply paying her off, isn't going to cut it. Further- if you do pay her off- are you even aware of the tax implications both Irish and Italian (and thankfully we do operate reciprochal arrangements)?
    Barr wrote: »
    I suppose it is a complicated situation. My ex does not want to be tied to a house in Ireland and just wants the cash. I don’t want to loose the tracker and get screwed by the bank.

    She just wants the cash? Thats nice. Her deposit and half the amount of the principle repaid to the date she stopped paying towards the mortgage- and not a penny more. You could very well end-up in a clawback situation- in which case she'll actually owe you considerable sums of money.


    You need professional help with this. Its a hell of a lot more complicated than you first suggested- and the issues including two different tax jurisdictions etc- on top of two spouses, is ripe for all manner of war between 4 different people. Its not just you and your ex in the equation- and if you check the terms of your mortgage- you're probably supposed to inform them of any change in material factors that might affect the banks claim on the property- such as 2 spouses............

    You've a very interesting time ahead of you. Now go get proper legal advice on this- simply running with comments I or any of the posters in this thread offer you- could result in very costly errors for both you and your ex.

    Get professional legal advice. Its going to cost you. It'll be money well spent.


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    #47
    Richard Dower
    Banned (with Prison Access) Posts: 21,634 ✭✭✭✭Richard Dower


    The_Conductor wrote: »
    you're probably supposed to inform them of any change in material factors that might affect the banks claim on the property- such as 2 spouses............


    +1....that stands out most to me, aside from the other stuff. Its the most basic thing the OP should have done + i am sure there are clauses in the contract that you may have broken.


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    #48
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    Op you never mentioned what bank you are with. There are banks transferring trackers to new mortgages so it's definitely not a no no that you will not be able to retain the tracker rate... it totally depends on your bank. You definitely will have to make an application to the bank and qualify for the mortgage in your own name... do you have the funds to buy her out? or will you be looking to increase the amount of the mortgage. It will be easier if you just want to transfer the outstanding mortgage to your name

    As previous posters mentioned you need legal advice. You also need to get a current valuation on the property.

    I presume your ex lived in this property at some stage so she can hardly expect to have lived rent free for that period.


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    #49
    Barr
    Registered Users Posts: 7,010 ✭✭✭Barr


    Trish56 wrote: »
    Op you never mentioned what bank you are with. There are banks transferring trackers to new mortgages so it's definitely not a no no that you will not be able to retain the tracker rate... it totally depends on your bank. You definitely will have to make an application to the bank and qualify for the mortgage in your own name... do you have the funds to buy her out? or will you be looking to increase the amount of the mortgage. It will be easier if you just want to transfer the outstanding mortgage to your name

    As previous posters mentioned you need legal advice. You also need to get a current valuation on the property.

    I presume your ex lived in this property at some stage so she can hardly expect to have lived rent free for that period.

    The mortgage is with the Bank of Ireland.

    I have the funds to buy her out. Its just the balance of the mortgage I need to transfer into my name.


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    #50
    whippet
    Registered Users Posts: 7,687 ✭✭✭whippet


    If her actions were to force a sale and the subsequent loss of a tracker rate I would suggest that you should factor the projected cash penalty for this over the life of the mortgage and deduct that from any potential payment you will make.

    This would be something only an experience legal practitioner could help you with.


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    #51
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    Barr,
    Solicitors are well used to dealing with this issue...my advice would be go see your Solicitor and ask him/her to contact BOI to find out what exactly is required to transfer the property and the o/s mortgage into your sole name. You need to provide your mortgage account number and a recent valuation which you should get completed for approx. €130

    Best of luck
    Trish 56


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