Mortgage Equity after separation

[Jammiest91]

Hello. Me and my other half (unmarried) are splitting up. We own a house together and I want my name taken off the mortgage and I want to move out.

My ex wants to stay in the house and take over the mortgage. He paid the deposit so I know I’m not entitled to any of that back. However, any money that has been spent doing renovations to the house has been from joint money. I’ve also paid half the mortgage for the last year (yes we only bought the house a year ago!).

I don’t see why I should walk away with nothing. Surely I’m entitled to something after paying towards the house for the last 12 months.

What do you all think? What should happen?

I need something, even if it’s just a couple of thousand, to be able to move on and rent somewhere.
I have a child too so I have to think about her and find somewhere decent to live. Child is not his by the way.

Unless it was legally protected by ring fencing you are due half the equity including the deposit. He should be buying you out. If he can't afford it then you need to sell. Getting him to agree to this may be the hard part. Going to court if needed.

Yes you are due some money.

legally if you jointly bought the house - you are both on the deeds and the mortgage then it is jointly owned. Is this the case?

He should have protected his deposit if you did jointly buy.
You should not have invested in it if you didn’t jointly buy without protecting that investment.

whatever the case if either of you went to court there is a good chance of a resolution in your favour. He is likely (not certain) to recover his deposit if he can clearly show he contributed it all. You would get your investment back. But this would be expensive and mentally draining. It could take years to resolve.

Put aside whatever your relationship issues are and sit down and agree you want to resolve this without legal costs in a civilised manner.

In your shoes i would calculate my investment in 2 ways. One is simply the money you put in. Capital to fund deposit and renovations plus mortgage capital repayment. The other is your share of the improved equity. Which is 50% of the current equity less his deposit. Ask for what ever is the better for you. Remember too he will have some costs to remortgage.

I wouldn’t try to go after 50% of his deposit. It is a low move. Move on with a return on your investment or recovery of your investment.

You should be entitled to something despite the deposit. If the equity has increased that should be a lot. Best thing is to get legal advice though to be honest.

Did you buy the house together or did he just put your name on the mortgage?
I would say you should get 50% of the equity.

Unlikely you will be able to get your name off the mortgage unless he refinances. Why would a lender release you....2 people to chase up is way better than one. Can he refinance by himself and will the interest rate be much higher?

You should probably be entitled to half of the increase in value of the house from when you bought it to when you move out (and relinquish your 1/2 ownership). You will not be entitled to the money back in full that you paid towards the mortgage and renovations, because you have to account for the value of the place that you and your child had to live for the last year (ie what would you otherwise have had to pay in rent if you weren't living there?).

Taking any of this to court is unlikely to result in more than what the legal costs will be.

Thanks everyone. No I won’t try and claim half the deposit and I don’t think that’s morally right after it was all his money. I know plenty of bitter, selfish people would do this but I’m not one of them.

So basically, the best thing to do is get the house valued and then I would get half the equity (minus his deposit). Even if that’s £5000 it would help me move on…

Who would pay the fees for him remortgaging? Would he expect me to contribute to that or is that his problem for wanting to keep the house?

Why would you think you would end up with nothing? Has he said as such?

He might not need to remortgage for £5k. He may get a loan. The fees are pretty small anyway and sometimes you can get a deal. Try and sort amicably if you are only thinking it is such a small amount of equity as fees will easily eat into that until there is no equity at all.

Do you have a copy of the forms from when you bought the house? Is there anything like this that tells you (question 10) how you own the property? https://assets.publishing.service.gov.uk/media/65afbf55bc0de3001318734e/TR1__2023-08-29_ct.doc

He'll have to buy you out if he wants to stay in the house otherwise you sell up & split the proceeds of sale (after the mortgage is repaid and taking off his deposit).

Get the house valued, agree a price, minus his deposit & what you originally paid, that's the equity.

50% of that is what he pays you. He needs a solicitor as you are transferring joint ownership into sole ownership so that needs conveyancing.

Just consider that if you have only been paying the mortgage for 12 months OP, nearly all of your mortgage payments will have gone on interest. Do you definitely know the value will have gone up in that time? Generally speaking, values have dropped very slightly over the period, will the works you have done outstrip that? I hope so for your sake, good luck.

I say that’s the way to go

Yes he did which I thought was wrong

House prices are pretty stagnant where I live in fact some are falling. But that is compared to the high of 2021.

You want your name off that mortgage asap, if you are due an amount as the value has gone up and you can both agree and settle that’s great. But you are liable for the debt until your name is off. If he defaulted on payments they can chase you for the debt.

He is probably freaking out because he thinks you want half his deposit. Obviously he should have ring fenced this deposit. Are you tenants in common or joint tenants?

There’s also the matter of the furniture that we bought together. If he wants to keep stuff surely he should give me some money towards it right?

If the furniture was bought jointly you need to either split it or he buys it off you. To be honest after a year I doubt after costs of taking you off the house is worth more, perhaps get it valued but be warned prices are down in some areas. My advice is you could ask for a set sum to cover the furniture etc eg £2000

My daughter was in a similar position recently. Split with boyfriend a year after buying their house. She had contributed half to the deposit also (ringfenced).
She couldn't afford to buy him out but, as the higher earner, he could afford the mortgage on his salary alone.
She settled for her deposit back and took the pragmatic view that the monthly mortgage payments were to be viewed as rent. If she'd claimed more, he wouldn't have been approved for a solo mortgage and she wouldn't have been able to leave and move on. Selling would be the only option which can be difficult when one party doesn't want to. It allowed a quick and simple break up.

As others have said,

houseboruces typically not gone up over the last year
you’ve most likely paid little or no capital off the mortared in the first year, just interest
in effect you’ve been renting

however, you can use the fact his deposit wasn’t ring fenced ( more fool him) as leverage. Legally if you own as joint tenants you’re “ entitled’ to 50%

how much was his deposit? That’s your bargaining power

Hi. I agree with @LemonTT - for this amount avoid courts at all costs. I personally would also avoid contacting a lawyer for legal advice - in my experience lawyers are a huge financial drain and tend to push you towards court. Courts cost thousands and are stressful and draining so definitely no point going down that route. If I were you I would do two things: 1) Contact a lawyer through justanswer.co.uk - it's £5 for a trial and then you can cancel before the cost goes up the following month. Ask that lawyer very clear questions about the legal frameworks under which you might be entitled to your investment back, you are then armed with information on what you could theoretically get if it went to court 2) Raise this with your ex and ask him if he will attend a mediation session with you do discuss the fair split of assets. Unfortunately mediation isn't cheap either - but its a low cheaper than lawyers, so if you can have the discussion with him without a mediator so much the better.

You've probably barely paid £5k off the equity in 12 months - and it costs a solicitor about £1500 to remove someone from the mortgage and deeds. Also don't a bank would allow him to remortgage so soon after taking the mortgage out.
So I'd probably chalk this one up to experience and walk away if I'm honest unless he can give you a couple of grand cash to get you set up somewhere else

Two very important points you haven’t answered:

• are you both on the deeds?
• can he afford to take over the mortgage by himself?