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Seperate on (7year gone) and mortgage

(32 Posts)
Wanda82 Sun 08-May-16 08:37:44

Good morning all I'm not sure if I'm in the right forum as I am new but please bear with me I hope someone can point me in the right direction!

My fiancé and I have been together 6 years, prior to our relationship he had a long term relationship with someone and they had a child and bought a house together. The house was purchased in Dec 2007 and was purchased through a mortgage of £82500 and a deposit put forward by my fiances parents of £40000. This deposit was written up by a solicitor and stating that upon sale of the house £40000 is to be returned directly to my finances parents- this money is to be their sons inheritance.

When my partner and I met in 2009 his ex remained in the home with their four year old son and paid the mortgage independently, my finances name is still on the mortgage. There were lots of issues in the early days including severe arrears ( that we were unaware of at the time) and the threat of repossession- we only found out about these issue by accident as she will not allow him access to any paper work or even the home. However since around 2013 the mortgage has been brought back up to date ( by the ex) and us been being paid regularly by her and her new partner.

Now it gets complicated. We have had a phone call This evening to ask 'if she moved out would we (my partner and I)' be interested in the house. When questioned it surmises that her and her partner have split and she is not able to afford the house on her own.

My question is what happens now?? My partner and I would very much like the house of we could ( we have been looking for somewhere new and we rent at the moment) and we would happily take over the mortgage to maintain the property for his sons future and his parents investment. However she is under the impression that she would 'have some money' out of the scenario- I think she's hoping for us to buy her out, something we don't have the means to do. Question is what CAN be done? My partner an I have no savings as we are marrying next July and though we would be able to afford a mortgage I'm not sure we would get one due to the unstable nature of my job ( I'm a teacher and there are no permemant contracts) and previous credit history.

We would like to secure his parents investment but also not lose the opportunity to own our own property: what are our options?

Again apologies if I've rambled or anything is confusing please ask if you don't get what I mean as any advice is welcome.

I have no preconceptions, in all honestly I've I just wanted his name off the mortgage for some time preferably before we marry next year but with this new issue I don't know what our options are and I certainly don't want the mortgage falling into arrears again- the last time that happened she said have would rather have it repossessed that let us live there, we are already in a better place as she's offering this time!

Thanks all!

Karoleann Sun 08-May-16 08:43:36

Well you could get a mortgage to buy her out, have the house valued by a local estate agent and then take off the the 40,000 and then half that cost and that would be the value of the mortgage that you needed to get.
It could be cheaper than finding another place.

However, if she's been a nightmare in the past, it may just be easier to sell the place and then both of you can put the equity into a new house.

lifeisunjust Sun 08-May-16 09:33:59

Ex partner is indeed entitled to 50% of any profit or loss on the house.

Wanda82 Sun 08-May-16 09:49:12

Thank you both for your replies.

Im confused as she has sole paid the mortgage for 6 years now, would my partner still be entitled to any ( though I highly doubt there is any) profits? Or because she has been sole occupant and payer would she be entitled to any all by her self?

I'm not money grabbing in the slightest is simply just don't know where we stand! When my h2b said yesterday to her yes we would be willing to take it over her words were ' it wouldn't be a case of taking it over - there would be some money to pay!'

lifeisunjust Sun 08-May-16 10:08:53

She is entitled because you stated the house in in joint ownership. Nothing to do with who paid the mortgage.

Berthatydfil Sun 08-May-16 10:33:10

Technically she should have paid your ex rent on his half but instead she paid the mortgage.
Is the mortgage interest only or capital repayment.?
I would say the following scenario would be fair
Property cost £x00,000 deposit of £40,000 so a mortgage of x minus 40. So in 2007 £40,000 equity all belonging to his parents.

In 2010
Sales value less Mortgage value (probably much the same as in 2007 even if it was a capital repayment) gives equity and the first £40,000 goes to his parents with the balance split equally

Sales value less mortgage equals equity
Equity split first £40,000 to him plus his share of the increase in value to 2010.
If it's a capital repayment mortgage she should get all the capital she's paid in over the 6 years if it's less than the equity.

If there's a positive balance remaining this will depend on what house prices have done in your area and you can split this.
This share would depend on them getting to a fair allocation for example if she's done done big improvements to the house which would increase its value then she should get more back. I'm not sure she should get all if it as in effect him being co owner and his parents putting down the deposit in the first place allowed her to gain that money.

Obviously if the house value has dropped she gets nothing.

So she and him need to agree on a figure for her equity and you and dp need a mortgage for that amount to buy her out.

Wanda82 Sun 08-May-16 10:46:25

Thank you all very much for your replies.

It's all so bloody confusing! Frankly I don't want anything from the house but I also refuse to 'pay her' as she is requesting! I would rather the house be sold and that be it (split or not split profits I don't care).

My concern is that the last two times she defaulted on the mortgage -severely enough to be served a repossession order if it wasn't brought back to date- she didn't tell us anything about it! My partner only found out because she gave him a letter addressed to him from the house by accident ( this was the repossession order) she has been hiding and refusing to give him any correspondence for years! She said then that she would let the josie be repossessed before allowing us to sort it out! Can she have the house repossessed and he no nothing about it? Would he (we) be liable in the same way as we would if it was sold and there was a profit?

I just want it gone! :-( and to top it all off my H2b is currently a big sap and won't do anything to address the situation not even contact the mortgage company!!

lifeisunjust Sun 08-May-16 10:50:16

Oh yes Berthatydfil has pointed out reasons it might not be as simple as 50/50 and the ex probably has a point about money to pay to her, if what she's paid in has meant an increase in value / reduction in size of mortgage.

I would resist from any further comments which are less than positive about the ex, I'm sure there will be 2 sides to this. But do remember having that home has meant security to your ex's child and that child would have needed that home, so arguing over it too much would not be a morally good thing.

Try and remove any emotion and thoughts one person deserves more / less because. Just treat this as a financial transaction.

Wanda82 Sun 08-May-16 10:55:08

Lifeisunjust I had not been negative simply factual all of these things have happened. It's the way it is.

As I've said frankly I don't want anything out of this apart from my partners name off the mortgage and the ties severed. I want this as eventually we want a mortgage ourselves ( getting married next year) and we can't do that with this hanging around.

I don't care what happens and we WONT under any circumstances be paying her anything at all! She stayed in the property in the understanding that she would keep up repayments to the mortgage and keep the house in a good state. All I know is that there have been severe arrears in the past.

I won't be removing any of my comments.

CodyKing Sun 08-May-16 10:59:33

Your DH needs to contact the mortgage provider and explain he's no longer there - forwarding your address - so he gets correspondence. His name is in the mortgage so he's responsible. The repossession orders will be in his name - meaning your mortgage application may not be approved.

Then you need to have the property valued -

I think you need some good league advice on a way forward because if it's defaulted selling and buying maybe an issues - especially as he doesn't know the full history of his own credit rating

lifeisunjust Sun 08-May-16 11:02:24

If the profit is say 50k, if you refuse to pay her 25k on what you've said, if you're taken to court, you'll lose.

You MUST consider what has been written and work out WITHOUT EMOTION what the ex is owed if anything then pay her.

"Understandings" are not legally binding if that is all it is and not a legally binding verbal agreement.

It is irrelevant there were arrears in the past. Your boyfriend's name is on the mortgage which means he has equal and free rights to keep his own knowledge up to date regards payments and the arrears were legally HIS as well. You cannot blame the ex as he was legally allowed to have access to his own mortgage and chose his own mortgage to go into arrears. This information was completely irrelevant to the financial transaction of selling up.

Wanda82 Sun 08-May-16 11:08:05

If you wanted me to write with emotion I. Could say a lot more but quite frankly I'm holding back! What I say is purely factual!!

what she is asking for is money upfront from us to take the house regardless of if there would be any profit in the house. I will not do that.

If thenhosie is sold and there's profit after the return of his parents money ( there's a contract held to say this must happen) then I don't want anything to do with it! We haven't lived there not paid for it and she can have it all! I'm not for one minute a money grabbing ex, I just want finances sorted!
I agree he needs to contact the mortgage company but each time this is mentioned it ends in a argument as he is totally clueless!

Berthatydfil Sun 08-May-16 11:23:56

Ok - you do know that technically she could get so far into arrears the £40,000 could be gone.
Or it could be repossessed and sold for a laughably low value and the £40,000 could be gone.
Also as joint mortgage holder he is probably jointly and severally liable for ALL ARREAS.

You don't want to pay her anything - well you (or him actually) might not have a choice.

I think you need to get it sorted now - work out a figure to buy her out or sell the house and start afresh but letting it slide won't help at all.

CodyKing Sun 08-May-16 11:24:57

You have bigger issues than the profit.

I can see your annoyed - but you need to get your DH head out of the sand - you are marrying a man who is hiding from this - he needs to step up and deal with it - because it will affect your financial future.

Berthatydfil Sun 08-May-16 11:26:28

Forgot to say if it was repossessed at a loss to the mortgage co they would go after him for the money - do you want this?

Also having a repossession on his record would probably mean you both would really struggle to get a mortgage of your own.

sallyhasleftthebuilding Sun 08-May-16 11:35:31

What's the current value of the property?

Is it a repayment mortgage?

What's outstanding on the mortgage?

You need to know your figures here

Has he paid child support?

Wanda82 Sun 08-May-16 11:40:14

I don't want the house repossessed however she previously has said she would allow this to happen.

I know my hubby is liable for issue relating to arrears etc.

I am aware that the house could be sold for less and the £40000 could be cut into- nothing I can do about this.

I would rather the house be sold and whatever is over be hers and that be that but I don't know :-(

I'm angry upset and confused all at the same time!

CodyKing Sun 08-May-16 11:50:10

Stop being angry and start getting the facts together so you can come at it from an informed place -

Look after your position

Wanda82 Sun 08-May-16 11:51:10

House bought for £130000, going by current sold prices in the area value around £135000-£150000 but will be valued

Mortgage repayment is £467 by her

Outstanding according to hubby's credit report £82500

Yes he pays child support and has done without fail for all the years he and her have been seperated

Berthatydfil Sun 08-May-16 11:57:28

The mortgage would have originally been for £90,000 and its £82500 now so she's reduced it by £7500.

If you sell you will have the estate agents fees and legal costs, plus it looks like prices haven't gone up that much either.

Perhaps depending on the sales value you could offer her £10,000 ?

Just5minswithDacre Sun 08-May-16 12:06:50

It's all so bloody confusing! Frankly I don't want anything from the house but I also refuse to 'pay her' as she is requesting! I would rather the house be sold and that be it (split or not split profits I don't care).

But you said upthread that you'd like to take the house over if possible. Buying her out is the SAME thing as splitting profits confused

Just5minswithDacre Sun 08-May-16 12:11:58

House bought for £130000, going by current sold prices in the area value around £135000-£150000 but will be valued

Mortgage repayment is £467 by her

Outstanding according to hubby's credit report £82500

So she's reduced the outstanding mortgage by £7500 and the value has increased by £5000-£20000.

That's going to be approx £20k gain to split between them.

She's covered the mortgage payments for both of them but also had all the use of the property so a straight split of the profits seems fair.

If your boyfriend wants to buy her out he needs to pay her approx £10k.

If you then want on to the mortgage and deed, that will need dealing with separately, maybe after your credit history has had time to heal.

Wanda82 Sun 08-May-16 12:25:23

The problem is we don't have any savings so wouldn't be able to pay her anything up front.

Ideally the house needs to be sold, but hubby loves the house :-(

Just5minswithDacre Sun 08-May-16 12:32:50

The thing is £10k is a bargain, considering what will be saved in fees etc, so it's worth looking at all the options available to raise it.

Do you and your fiance both have poor credit? Could you scale back your wedding plans? Get a personal loan? His parents are obviously generous and supportive; Maybe they would be able and willing to loan him some of the money (with conditions) once the situation was explained to them?

Where is your OH's ex and child going to live if she gets her wish to move out? Will she be somewhere stable for the rest of his childhood?

I'm a bit confused about whey you're angry TBH. Getting into arrears when she was struggling financially doesn't sound like a spiteful act. It must have been a shock to her to be left on her own with a child and a mortgage less than two years after buying the house as a family. It's not really clear what she's done wrong in your eyes.

CodyKing Sun 08-May-16 12:37:28

Then you remortgage to the tune of 10K

10K on the monthly repayment won't be much -

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