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Original poster

Release half house equity

14 replies

TwoToTango · 02/05/2021 14:00

Hi
I'd be grateful of any experiences or advice re equity release. The situation is that we are splitting up, the house is mortgage free. I work full time and partner hasn't worked for last 6 years so no real savings. I could afford to remortgage 50% to pay him off but he won't agree to this as he wants to stay in the house. I can't afford to leave and get another mortgage for full house price, due to age I could manage to get a 50% mortgage. We are both in 50s so if I had another mortgage I would need to pay it back in approx 12 years.
A friend has suggested equity release i.e. release 50% of the house value so I could use that as a down payment on another property. The downside of this at the moment is that I'm not 55 as most companies specify this as a minimum age.
Does anyone have experience of this situation and have any better solutions or experience of equity release and how it works and any pitfalls in this situation.
Thank you in advance

OP posts:
BasinHaircut · 02/05/2021 14:05

Either you buy him out as you say or he buys you out?

Either way you are going to have to take out a mortgage for the remainder of the value of your new home. Whether that’s the house you are currently in or another one.

If you both want to stay in the house and can’t agree which one of you gets to then you have to sell and both walk away with half of the money and start again.

I don’t know anything about equity release but would you still own the house in that scenario and therefore if you buy again it would class as a second home and be taxed to the hilt?

middleeasternpromise · 02/05/2021 14:15

It sounds like your biggest problem is a partner who isn't going to take any responsibility for anything. If he wants to stay in the house but has no income source and hasn't had one for at least several years - I would sort that bit out first and it sounds like you may have to force a house sale to give him a reality check. Are you married and divorcing and are there any dependents ? These things make a difference to how assets are split. Do you have pensions etc as this can also change the sort of mortgage you are eligible for and the time frames for repaying them.

Original poster
TwoToTango · 02/05/2021 14:27

Thanks for the replies.
Equity release does seem complex and I did wonder about the second home scenario - unless the equity could be released and used to pay me off.
We aren't married, no dependents - 1 adult DS who lives at home.

Both have pensions - mine is a work scheme and his is personal one with very small pot.
Its a difficult situation - I don't mind either staying in house or buying new one as I just want to move on. Its made more difficult due me having to work from home and will have to for the foreseeable future so I'm trying to keep the peace.
He wants to stay in house as for various reasons and can't afford to move elsewhere or get a mortgage to pay me off (not working for medical reasons).
If worse comes to worse I guess I would have to move into rented accommodation while forcing a house sale - sorry, if this is stupid question but this would be done through solicitor I guess? There may be no other way but I imagine this would be quite costly and time consuming especially if he won't agree. I could imagine him putting on any potential buyers and I don't suppose many people want to buy a house with someone in it who is refusing to leave.

OP posts:
Turmerictolly · 02/05/2021 14:42

I think you need to see a solicitor- some firms offer an initial first half an hour for free. Are you married?

WellIWasInTheNeighbourhoo · 02/05/2021 15:11

As you are not married he has very few options and cannot go after your money or pension. He cannot afford to stay in the house as he has no money to buy you out, and no money to pay a mortgage, so he has no choice - whereas you do. I would speak to a solicitor about how to get him out and pursue that. Speak to a mortgage broker and see what you can get and how much it will cost, debt is very cheap right now so a mortgage would be much preferable to equity release at your age.

middleeasternpromise · 02/05/2021 15:13

You need to start talking to him to understand how he sees this separation working. Do you know if the property is jointly owned and how? That will help you work out your starting points and if you both agree on them ie what split will the asset be agreed upon. If he wants to stay in the house but can't buy you out for whatever reasons, you are going to have to bring him to the table to understand that this really isn't an option - he either needs to buy you out or you will both be selling. I would not move out if I were you with this dynamic as he could make the sale very difficult and leave you out of pocket renting else where and still paying mortgage (because he cant) as well as trying to fund whatever legal intervention you might need if he is refusing to see sense. You can of course ask for a share of any legal fees to be offset against his amount as blocking because you wont enter into discussion is not really a defense. You can read around as many legal professionals offer a lot of information on their websites to help you understand your specific circumstances and what legal input you may need. I think you need to get reading so you can make use of any legal advice by arriving prepared. This will keep your costs down overall.

Hoppinggreen · 02/05/2021 17:44

If he can’t buy you out he can’t stay in the house indefinitely.
My friend has just left her H and he doesn’t want to move out but according to her solicitor he either buys her out or pays her rent.
You need legal advice

BasinHaircut · 02/05/2021 20:31

Ahh sorry I see, I had assumed you were married. In a crazy way, the fact that you are not potentially makes it more difficult. In a divorce you would be legally splitting your assets (and by definition force one of both of you to leave) but as you are not married I have no idea how that would work as I don’t know if you can/how you would force the sale?

Which is I guess what you were asking!

Darbs76 · 06/05/2021 21:16

I think you have to try and get him to realise that he is going to have to leave the house. Yes it’s difficult for him as he’s not got an income to buy you out, but that doesn’t mean you can just let him stay in the house when you own half. He will have to consider moving somewhere cheaper with his share of the house, either you buying him out or selling the property. Either way he can’t stay at the house, it’s unfair on you. You both need to move on

lostlife · 06/05/2021 23:48

You need to look at all assets including pension

It may well be possible that neither of you will be able to stay in the house

BasiliskStare · 07/05/2021 00:01

@TwoToTango - it may be different now but I would think very carefully about equity release - the interest rates can be very punitive.

I agree with previous posters - it might sound like an easy solution ( equity release) but I would look at how to get him to sell the house. Probably cheaper even to give him a bit more of the equity as a sweetener rather than pay the rates for equity release - I would if you can stay in the house and put it up for sale and just make it obvious to him he cannot keep it. Been there , done that Sad

TiddyTid · 07/05/2021 00:34

You won't get 50% on an equity release plan OP.

Anordinarymum · 07/05/2021 00:41

@TiddyTid

You won't get 50% on an equity release plan OP.
Exactly this and the interest rates are so high you will live to regret taking equity out this way.

I would only consider doing this if I were penniless, very old and had no children. It's an awful rip off really and preys on people who feel they have little choice but to do such a thing

Frenchfancy · 07/05/2021 19:05

Do not do equity release. It is a very bad choice financially.

You need to sell. Do you both own the house? Tenants in common? I think you need a court order to force the sale.

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