What am I entitled to?

A

anxious08

Guest
My partner and I recently split. My partner is offering to buy me out of the house we bought together. At the moment the house is in negative equity even though we have both invested over 20,000 into the property.

My ex is offering me 5,000 to sign the deeds over, i feel that i should get more. I have been told that I am entitled to the amount i have paid off the mortgage, is this true??

Any advice would be appreciated
 
You might not be getting a bad deal here if the house is in negative equity. Are you sure this is the position or have you just been told the house is in negative equity?
 
If this was a 50:50 purchase and both parties contributed equally to date then surely you are entitled to approximately (market value of the property - outstanding mortgage) / 2. If this is negative then getting any cash sum now is probably a good deal at this point in time as mentioned above.
 
Yeah, we got a valuation and we have lost 10,000. Just feel that its not much considering my partner will get everything, I lose my first time buyers benefits etc.
 
Would you be in a position to buy him out or do you want to? Ideally it would be better to wait for the market to turn around and for the house price to rise and extra mortgage repayments be made to get you out of negative equity but this might take a couple of years to come around.
 
anxious08 said:
Yeah, we got a valuation and we have lost 10,000. Just feel that its not much considering my partner will get everything
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Then you need to negotiate a package that is acceptable to you. What do you think you should get and why? There is no automatic entitlement to anything here other than if you force the sale of the property and end up out of pocket having cleared the mortgage anyway.
, I lose my first time buyers benefits etc.
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Only with regard to stamp duty on a non SD exempt property and whatever period of your 7 years "FTB" preferential owner occupier mortgage interest relief period that you have used up. It's not the end of the world.
 
Plus for stamp duty you would still be entitled to owner occupier relief on new houses which could result in you either being exempt from stamp duty or paying a reduced rate.
 
I don't know what I should get, just feel I have invested a lot into the property to walk away with nothing.
So if there is no set guidelines it is up to myself and my partner to agree on a settlement
 
anxious08 said:
I don't know what I should get, just feel I have invested a lot into the property to walk away with nothing.
So if there is no set guidelines it is up to myself and my partner to agree on a settlement
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Here are your choices - all already set out for you.

1. Take what is on offer. Walk away.
2. Sell house and split proceeds. Walk away.
3. Buy out partner. S/He walks away.
4. Hold onto house in the hope that house price pulls you up out of negative equity. Both of you are stuck.

I'm not sure where you think extra money would/should come from. Yes, you may have invested etc.,etc but its not showing any return.

And yes, its up to the two of you to negotiate a settlement. You could go to Court if you wanted but it would cost you a shed load of money to achieve a lesser result.

mf
 
anxious08 said:
Yeah, we got a valuation and we have lost 10,000. Just feel that its not much considering my partner will get everything, I lose my first time buyers benefits etc.
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From a dispassionate financial point of view, you already have nothing. In fact you have less than nothing, -€5,000. And don't forget this is only a valuation, while it may realise more if you actually sold it, there is the risk that it might sell for even less. If your ex is willing to pay you anything at all to buy you out you should bite her hand off - based on the expected value she is overpaying for the place, plus you are absolved of the risk. An excellent deal for you.

Just a technical point here. She should not pay you €5,000 to buy you out (you owe half the mortgage remember). I just assume you mean the she has said she will buy out your 50% share of the mortgage plus an extra €5,000.
 
anxious08 said:
Yeah, we got a valuation and we have lost 10,000. Just feel that its not much considering my partner will get everything, I lose my first time buyers benefits etc.
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If this valuation is correct, then it means that you have lost €5,000 each (assuming a 50:50 split) because you are in negative equity. Therefore, you are lucky that he is offering you anything at all because if you both decided to sell tomorrow you would have to contribute an extra €5,000 just to pay off the mortgage! You are lucky that he is not asking you to contribute you share of the loss, €5,000.
 
I'm a little confused here - negative equity is where the mortgage owed is more than the value of the property. If not where the valuation has fallen below the price that was paid. I am not sure that the OP fully appreciates the difference.

The OP says that they both put in €20k each into the house = €40k and if the house has fallen by €10k then that still leave €30k over. Half of this is €15k.

I fully appreciate that the full €40k might not have been used to purchase the house.

But the way of working it out is quite simple and already posted.

Value of house minus remaining mortgage divided by 2.

€5k seems very little to me and very rounded, but if might be correct.
 
browser said:
I'm a little confused here - negative equity is where the mortgage owed is more than the value of the property. If not where the valuation has fallen below the price that was paid. I am not sure that the OP fully appreciates the difference.
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From what the OP indicated it looked to me that they were in negative equity because the value of the house is €10,000 less than the outstanding mortgage. This would mean that the OP and her partner would have to contribute €5,000 each towards this shortfall if they decided to sell the house. Therefore, if her partner is actually offering to pay her €5,000 to get out, she is getting a good deal.
 
browser said:
I'm a little confused here - negative equity is where the mortgage owed is more than the value of the property. If not where the valuation has fallen below the price that was paid. I am not sure that the OP fully appreciates the difference.
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Fair point. Maybe the original poster can post the original and current mortgage balance and an estimated property value.
 
The remaining mortgage is 360,000. The house was valued at 350,000. I guess the general consensus is that I am not entitled to anything other than what the house valuation is, which means I owe 5,000.

Thanks for all the help
 
anxious08 said:
Yeah, we got a valuation and we have lost 10,000. Just feel that its not much considering my partner will get everything.
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Your partner is getting €15,000 worth of debt. I can't see how you think you are entitled to the mortgage repayments you made - you were living there.

I would take the deal offered.
 
Just wondering if you are leaving stuff in the house which would not be included in a valuation eg. kitchen appliances, sofa, tv, beds, kitchen table. All that costs money which you paid for. Also don't rely on one valuation get at least two more and average.
 
Without sounding harsh, I think the op is being unfair on the remaining partner. €5K is a good offer in the circumstances.

If you were to force a sale, the following could happen.

1. You end up getting even less than the estimated value of the house.

2. There would be Estate Agent Fees, Solicitors Fees, removal fees, etc as further deductions.

My thinking is that there would be a far bigger hole in the finances than €10K divided between 2.

You could insist on taking your share of the furniture and selling that. What type of return would you get on second hand furniture? I would think that is where the €5K offer to walk away is coming from.

Good luck with it, these type of situations are usually horrible for everybody concerned.

I split up with my partner in 2000. Despite the fact we were very young, we had built up an equity in the house of over €200K. That was very nasty. We were even fighting over the dog. Thinking back now, he hid the dog at his parents house, left the side gate open and told me someone had stolen her. I did not turn up for work that day, but instead went trawling the nearby estates in an upset state looking for the dog. He kept that up for weeks. I will never forget it.
 
Definitely take the offer, you will walk away debt free and he will have the burden of the mortgage and you can start off on a clean slate, I think that you mean you invested a lot of time and emotion in the house but you need to let that go and think practically now - good luck !!!
 
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