Joint mortgage/separating/not married

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futurebabe

Registered User
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Any advice appreciated.

Separating after 15 years cohabiting, house jointly purchased, 17 yrs remaining on mortgage term.
2 children aged 15, children spend equal time with both parents so no maintenance being paid from partner who left family home.
mortgage paid equally by us both, school cost etc paid equally also.
What options do I have to buy him out/ change mortgage to my own name?

I earn 31,800 per year
House is not in negative equity
110,000 remaining balance
House purchase cost was 150,000 value now approx 220,000

In mediation at present, ex agreeable to paying mortgage jointly until cleared.
Also have option to sell then, sell now or at any stage over remaing mortgage term splitting proceeds 2/3 me and 1/3 him

Option to buy him out now or at any stage in future also would be 2/3 : 1/3

I'm reckoning buying him out now is a better option ? Any advice, thanks
 
What is the interest rate on the mortgage?
You are paying 50% of the mortgage, and will take 66.66% of the house sale should it be sold.
I would say it is to your advantage to leave this deal as it is for now. Will this arrangement change after the kids leave the house?
 
ant dee said:
What is the interest rate on the mortgage?
You are paying 50% of the mortgage, and will take 66.66% of the house sale should it be sold.
I would say it is to your advantage to leave this deal as it is for now. Will this arrangement change after the kids leave the house?
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No this arrangement will stay until mortgage is repaid in full. Would rather not sell and have to move as location is in very desirable area and has potential for luxury B&B business in future- and house/ area would be where I'd want to live as an older person ie when I'm retired etc
 
The proceeds now would be €110k (€220k value - €110k mortgage.)
He is entitled to 1/3rd of that.
You would have to pay him around €35k.
Assuming you have no other cash, you would have to get a mortgage of €145k to replace your existing mortgage.
I don't think any lender will give you that based on your current salary.


If you could get this mortgage, should you go for it?

Let's look at what will happen over the next year

If house prices don't change...

With an interest rate of 3.5%, he will pay around €2,000 interest over the next year.
He will pay around €2,000 in capital as well.
He will get back around €1,300 (1/3rd of the capital paid off by both of you over the year.)
So he will be down €2,700 (€4,000 - €1,300)
He will get 1/3rd of any increase in the value of the property.

If house prices increase by 5%
He will also get €220k@5% = €11,000 @33% €3,630

If house prices fall by 5%, he will lose €3,630

A little above 3% is the cut-off point. €220k @3% = €6,600 @33% = €2,200

Review the decision each year.
As the years progress, it becomes a better deal for him.
In the last year, he will pay €4,000 which will be almost all capital.
He will get back €2,600 - 1/3rd of the capital paid off by both of you.
He will be down only €1,400.
If the house is then worth €300k, and increases by 5%, he will get a further €5,000 (1/3rd of €15,000)


But all in all, I think on the salary that you are on, let him continue paying half the repayments.

Brendan
 
Brendan Burgess said:
The proceeds now would be €110k (€220k value - €110k mortgage.)
He is entitled to 1/3rd of that.
You would have to pay him around €35k.
Assuming you have no other cash, you would have to get a mortgage of €145k to replace your existing mortgage.
I don't think any lender will give you that based on your current salary.


If you could get this mortgage, should you go for it?

Let's look at what will happen over the next year

If house prices don't change...

With an interest rate of 3.5%, he will pay around €2,000 interest over the next year.
He will pay around €2,000 in capital as well.
He will get back around €1,300 (1/3rd of the capital paid off by both of you over the year.)
So he will be down €2,700 (€4,000 - €1,300)
He will get 1/3rd of any increase in the value of the property.

If house prices increase by 5%
He will also get €220k@5% = €11,000 @33% €3,630

If house prices fall by 5%, he will lose €3,630

A little above 3% is the cut-off point. €220k @3% = €6,600 @33% = €2,200

Review the decision each year.
As the years progress, it becomes a better deal for him.
In the last year, he will pay €4,000 which will be almost all capital.
He will get back €2,600 - 1/3rd of the capital paid off by both of you.
He will be down only €1,400.
If the house is then worth €300k, and increases by 5%, he will get a further €5,000 (1/3rd of €15,000)


But all in all, I think on the salary that you are on, let him continue paying half the repayments.

Brendan
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Thank you, as you say it might be aswell to leave well enough alone - my concern is that if I wait till the mortgage is fully paid off I will be 62 yrs old at that stage and I may not be able to raise the 1/3 to buy him out if house prices rise significantly. Maybe be monitoring values and my personal financial situations each year is best as to when would be best to buy him out. Mortgage cost monthly at the moment is only €434 each (incl house insurance) so very manageable.
 
futurebabe said:
Mortgage cost monthly at the moment is only €434 each (incl house insurance) so very manageable.
Click to expand...
Then put at least 434 into a savings account each month. If you were taking on the whole mortgage now you would be paying it, so you should have it to spare.
That is at least 5K you are saving a year in order to put towards a lump sum to pay him when you are in a position to take the full mortgage.
 
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