Positive equity - can I buy ex partner out?

O

overtheside

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Broken up with partner, no kids, and have a house that:

Originally bought for 340k.
I put 110k in to renovating the house, agreement signed if we ever sell house 110k would be returned to myself.
House worth around 550k - 600K
Deeds in both our name
Loan (AIB) in both our name
Savings for myself of around 140k
Wage: 80k


Would they let me buy her out and if so how much would I need to pay?
 
There are two aspects:

What is the mortgage?

Who is paying?

Is your former partner cooperative?

Bank doesn't have a say - but they may be slow to release partner from loan.

Nothing stopping you buying him or her out but it needs thinking through.
 
Variable rate mortgage
Both have been equally paying
Yes she is cooperative, to be honest if she could buy me out and really wanted the house I would be okay with that too.

I also should have mentioned I have another property that I rent out currently, tracker mortgage and rent is +250 euro of the mortgage.

Thanks for the reply.
 
It's best to provide all the information in one go, rather than dripping it to us.

When buying the house...

Did you have a written agreement about what you were doing?

Price of house
Size of deposit
Each person's contribution to the mortgage
Amount of mortgage

Since buying the house...
How much have you spent on it?
Is this reflected in the current value of the house?
What was agreed? "I put 110k in to renovating the house, agreement signed if we ever sell house 110k would be returned to myself."
Has she spent anything on it?
 
Yes, sorry, should have mentioned. It’s not necessarily something I have been thinking about with regards figures and just getting my head around them now. The only agreements in place is with regards the 110k. No other agreements with regards who paid for what be it extra’s like furniture and appliances.

Price of house: 340k
Deposit: 30k
Me: 20k Partner: 10k
Each person’s contribution to Mortgage = 725 euro each
Mortgage was around 310k
Yes the money put into the house is reflected in the current value of around 550 -600k but also the fact that prices have shot up in the area for the last couple of years.
 
OK, say, you sell your house...

|total|you|her
Sales price|598
Less mortgage outstanding|298
Net proceeds|300
Split as follows:
Return of your upgrade|110 |110
Return of deposits |30|20|10
split balance |160 |80|80
Share|300|210|90
So if you sell the house for €598, you would get €210 and she would get €90

So you should pay her €90k to take over her interest in the house/mortgage.

Or, she should pay you €210k to buy out your share.


I also should have mentioned I have another property that I rent out currently, tracker mortgage and rent is +250 euro of the mortgage.
Click to expand...

I don't think that this should interfere with your chances of the lender allowing you to take over the mortgage on your home in your name. But it might. If so, you should consider selling this. But it's probably a very profitable investment, so it would be a last resort.
 
Thanks for the reply. If I sold the apartment I would get less or at a push even of what is left on the mortgage. The reason it is profitable is the fact that I have a tracker on it and rents have gone up too.

Would prefer to keep it as it pays for itself, with a bit on top and would be nice to have it paid off before retirement age and have that asset. Either that or sell the house, split the difference and move into the apartment.

Do banks impose a penalty for paying off a mortgage early if I was to sell the house?
 
Easy question first - no the bank does not charge a penalty for early repayment of the mortgage.

First you need to enter into discussions with your ex and agree a price for you to buy out her interest in the house.

Assuming you can reach such an agreement, then you should apply to the bank to take over the mortgage.

If they refuse, you could sell the house and move into the apartment.

Or you and your ex could continue to own the house and let it until such time as the bank allows you to take over the mortgage. However, this is messy and a clean break with your ex is preferable for all concerned.
 
You have an 80K salary and an existing mortgage of 298K. While this information is somewhat sparse, I don't see the bank agreeing to release your partner from the mortgage. No harm in trying and you will need to pay her the 90K share of the equity from your savings!
 
Come to a written legal arrangement with Partner dealing with an eventual sale or buy her out in the agreement (preferable if it was her principal residence as well). A side legal agreement is the equitable side even if the legal side is joint. In other words there are options. It would be worth spending a few bob with a legal practitioner who is solution oriented.

Is it a Principal Residence for you?

If you have a tracker on this don't lose it by removing partners name.

Keep rental property.
 
Yes, both principal residence. Tracker on the apartment not the house, so that is not an issue.

Thanks all, agreed on the legal part, just wanted to get an idea initially to understand what I would need to discuss.
 
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