Joint Mortgage - How does buyout work?

[ThatCraftyPeer]

So I'm currently separated and will need to get a place of my own. (Currently moved back in with my parents) Me and my wife have a mortgage together on a house we bought 10 years ago. It sounds as though her dad is happy to buy me out. Now I know the house needs valuing and then you would subtract what's left of the mortgage from this then half it. However. Because the house isn't being sold and I am only removing the equity, in Theory she could sell the house, pay what's left of the mortgage and be left with a much larger sum to put down on a different property. For example, if the house was valued at £200,000 and there was £80,000 mortgage, I would get £60,000 but she could sell the house 2 months later and be left with £120,000. Now please correct me if I have this completely wrong but how is that Fair?

Yes - that’s possible, but more likely that she will continue to live there for a while. In the meantime, you will buy a property thst will also increase in value over the sane time frame.

The alternative is for you to take a gamble, buy the property and give your wife the equity so she can but elsewhere.

The 120k she would received would half the equity plus the 60k which is a gift from her father. You have no claim on her fathers gift.

Aren’t you taking into account the 60k twice in that she is having her Dad pay you so that 60k is his

surely it is the same as selling and her getting the 60k from her Dad

60k belongs to her dad. Of course he could gift that to his daughter but that's his prerogative. If the house is worth 200k with an 80k mortgage, you and your ex have 60k assets each in the house. You're not entitled to more whether the sale money goes to the bank or to her dad, I'm afraid.

I had a similar confusion. You’ve misunderstood the maths as I have. Your ex’s dad is buying your entire half. So if the house is worth £200,000 - he needs £100,000 to buy you out. If your remaining mortgage is £80,000 (your share being £40,000) then £60,000 goes to you and then he either gets a mortgage for £40,000 or pays it cash. Leaving just £40,000 on the mortgage for him and his daughter to pay off.

Breakdown:
You - Get £60,000 cash
Dad - Pays £100,000 in either mortgage or cash or a mix.
Ex - Keeps 50% of her house still, nothing changes financially (unless agreed between dad and daughter).

Assuming no agreement, if they sell the house after 2 months:
Ex - £60,000 cash
Dad - £60,000 cash
Mortgage Provider - £80,000

"Theory she could sell the house, pay what's left of the mortgage and be left with a much larger sum to put down on a different property."

🤦🏼‍♀️🤦🏼‍♀️🤦🏼‍♀️This is the crucial part, she would have to find the money to pay off the mortgage. So she would need to find a spare £80k for that to happen!

She will end up with £60k equity (same as you get), an £80k mortgage and £60k that either she owes her DF or that her DF has generously gifted her.

The extra £60,000 comes from her dad, in the hypothetical future sale situation, whether she keeps it or has to repay is between them.

I'm not sure what you think isn't fair?
Unless it's that you don't family member to give you £60,000 and she does?
Because that's just unfortunate

As your name is on the mortgage, she would have to reapply for another mortgage in just her name. Is she able to qualify for this with her income?

Ok so that makes sense, I suspect her DF will be gifting her the 60k and won't be expecting it back which is a slightly bitter pill to swallow given that I'm the innocent party in all this but hey ho

Just to ask here - is your expectation that her dad not help her out? This would be no different than if he was to transfer her £60,000 into her bank account. It's got nothing to do with you at this point.