Could anyone talk me very slowly through how buying someone out of the house works?

[Helpagirlout222]

I hear people talking about this, and know people who have "bought their ex out of the house". Mainly as far as I know with large cash injections from family.
I don't think it's an option for me, but I'm clueless as to how it would work.
Ex-dh (separated, not divorced) and I have both paid the mortgage equally over many years. Unfortunately it's massive as we remortgaged to get work done on the house. However we still have some equity in the house.
I am in the house with the kids, and in an ideal world we'd stay here.
Could anyone explain how I even begin to work out what his share would be? In very simple terms?!
I know I'd need to get the house valued, then, work out the difference between what's left on the mortgage and the value of the house?
Utterly clueless. Any help very gratefully received!

It's not just the house though! You need a comprehensive financial order to get divorced. This must include all assets - equity, pensions, investments, furniture, jewellery...... everything.

You need to educate yourself and seek legal advice. Wikivorce, Divorce for Dummies, family solicitors websites are good starting points.

Then make a detailed list of all assets and see a competent family solicitor. If you are the primary residential parent, you may be awarded quite a bit more than 50%. But don't try to do this on your own.

I got a house valuation and looked into the size of mortgage I could get on my own to see if I could even afford it on my own.

To work out how much I would need I looked at the current valuation deducted the mortgage then divided the remaining equity in 2?
so let's say for example house was 200k. Mortgage was 150k. Then total equity was 50k so it was 25k each. To get the home I would need to not only be able to get a mortgage on my own for the whole 150k but also find 25k to buy him out of his equity.

This could be added to mortgage or from family lump sum.

Thank you both! @PaminaMozart yes, I know, I have to get on top of all this. There are very limited assets, no savings, just house and pensions.

I know I need to get everything sorted, but was just idly wondering about the house.

Thank you @Attictroll
Yes the bit I think I am struggling with is the fact that I wouldn't be reducing our current mortgage?
So it's probably unaffordable. Even if I got the (eg) 25k to give to ex DH, I'm then left here paying what's currently a joint mortgage on my own?

Would I be applying for a new mortgage product or just removing him from the existing?

You find out how much you can offer him (ideally at least 50% of the equity) and see if he’ll accept that offer.
Sometimes men will accept less house equity if you take less pension, savings etc because those things will be more important to him.

In very basic terms (and let’s for arguments sake say you agree to a 50:50 split of the house equity).

As an example:

If the house was valued at £400k:

And the mortgage remaining on it is £200k - there is £200k equity in the house.

If you agree a 50:50 split - you would need to pay your EH £100k.

You would also need to have the mortgage lending capacity to take on the remaining mortgage (in this case / example - £200k).

Hope that makes sense.

Mine was easy I did it through my solicitor and they paid his and he signed the house over it was easy once agreed happened in 48 hours

I had to apply for a new one for just me

My ex and I agreed an amount ourselves. I then went to my banks mortgage advisor and they sorted all the paperwork

Thank you all so much! So actually I wouldn't just have the hurdle of finding the lump to give him, I'd also have to pass affordability checks for a new product? Eek eek eek

Yes you would need to pass affordability checks for a new product.

My ex bought me out.

He applied for a new mortgage in his sole name which covered the ant he had to give me and the amt remaining on the mortgage.

Once the mortgage and divorce came through he gave me the money and I then bought my own (smaller cheaper) house as a cash buyer.

@Helpagirlout222 - as a first step, talk to your current mortgage provider and also a couple of mortgage brokers.

Maybe the Moneysavingexpert forum also has some useful information? Also check out Wikivorce.

My ex says he'd be happy in a smaller place so that's what I'd ideally like to be doing the other way round @Octavia64.
I think the mortgage payments at the other side would be too big tho, unless I suppose I extended the term of the mortgage? I'm probably too old for that!

Oh sorry @PaminaMozart crossed posts
Thank you, I will get reading!

Do not forget to include cost of selling (estate agents, solictors, taxes and so on) plus the costs of buying a new place and fees. Include also the costs of closinh a mortage with the bank and the cost of opening a new one.

They can add up to a chuck of change and should be part of your analysis.

Thank you @yesmen
I have been recommended a mortgage broker so hopefully she can chat it through with me. I think it's too much of a stretch for me, but want to investigate before ruling it out!

I bought out XH. We had some savings and some equity. There was some back and forth about who had contributed what and we looked at pensions. He is a higher earner but I went part time and reduced childcare costs for example.
I got 3 valuations of the house and we took the average so we could calculate how much equity we had. We agreed on a sum that seemed reasonable to both of us (enough for him to get a deposit on a house of his own). I was lucky enough to get a financial gift from a family member to cover the shortfall from what we agreed was a fair amount to what we had in savings. I had to get a new mortgage. It depends on the mortgage provider but the joint one wouldn’t lend to me on my own (even though I’d been paying it on my own for months!) and I had to a one with a different provider. With changes in interest rates, that was more expensive (ironically).
You can go on entitledto.com and get an idea of how much you could claim in benefits if you’re on a lower income. If you’re entitled to universal credit, you can get discounts on household bills like broadband.
It does sound like you would struggle to buy him out. Sale would release capital so you could get something more affordable on your own?

Everyone's circumstances will be different but for us it went as follows:

We agreed a valuation, didn't get an official one.
Halved that value and added in half our savings to that. We didn't have a mortgage so nothing to deduct.
I agreed to pay him that amount in exchange for the property and got a legal separation document done.
I paid the majority of the amount by using the tax free cash from my SIPP (I'm over 55) and took a mortgage on the house for the rest. Use a broker for the mortgage, they are now available up to age 80 if you can prove affordable into retirement.

We agreed to keep our own pensions, split up cars and agreed on house contents etc amicably so it was fairly simple really.

My situation was a little different as not married. I had an estate agent value the house and ex and I agreed on the amount from this. I was able to pay my ex off with savings as it was not a huge amount. (Again a little different as had declaration of trust due to inheritance).

i would imagine if you didn’t have the money to ‘buy out’ your ex, then you would need to remortgage the house. You can speak to a mortgage broker to see if this is doable.

Thank you all this is so helpful. I think (ignoring the part where a relative has to helpfully bail me out) my issue would be paying the mortgage going forward. It would only be for a few years in this property until the last dc has left, and then I'd very happily downsize as I don't relish the thought of the stress of a big mortgage on a big house. But I'd equally very much like to avoid the upheaval of moving them if I don't need to.

You'll need to add the lump sum you pay him to the amount you need to seek a mortgage for, unless you have savings or he's prepared to wait until you downsize.

If it's hefty, but do-able and you plan to downsize in a few years you could check how far you can stretch the length of the mortgage. Some go past pensionable age, if you have a decent pension.

Also keep in mind that they won't take your intention to sell in a few years into consideration. They will need you to prove affordability for the full term of what they are prepared to lend to you. This is where using a broker helps.

I'm in a similar situation. My DC are adults but eldest still lives with me and younger will be finishing uni soon and returning home. I needed to keep a big enough property to ensure that they both have somewhere to live for now. Longer term I'll be downsizing.

I needed to keep the payments as affordable as possible as ex is no longer prepared to provide any financial support to either DC regardless of the fact one is a student and the other is autistic and struggling to get work. So despite me being the higher earner and having supported the lifestyle we had, he now has far more disposable income than me as has a mortgage free property big enough to house only himself and only himself to support.

Anyway, good luck with it all, I hope you get it sorted out.

Yup

I've had a shocker of a week about this very subject.

I earn £85k - houses worth £350k and mortgage is currently £170k - I have to pay extra £60k

Bank who mortgage is currently with is refusing to lend me the additional borrowing to pay him and remove him from the mortgage and deeds

Even though what I'm asking for is well within affordability and mortgage vs salary multipliers

I'm expecting to have to pay a hefty early repayment charge and find another lender who will help me (not proving easy at the moment)

That is my fear, that he doesn't contribute to uni and I can't manage it all. He says he will but who knows.
I really appreciate you, and everyone else, sharing their stories, it helps so much