Splitsville

Rockshamrover

Hi, A friend of mine (really not me) recently was told by her BF that he didn't love her anymore and that it was all over. She was heartbroken as you can imagine.

Her biggest problem is that they have a house that they both pay 50 50 on the mortgage. He told her that she can keep the house if she can continue to pay the mortgage herself. She cannot afford the repayments alone and is wondering what options are available to her. Bad enough to lose the BF but to lose your house too would be a disaster.

The value of the property is less than the amount borrowed so selling is not an option. She is considering taking in a lodger or two.

Does anyone know what the banks would do in this situation? Could they allow her to reduce repayments and pay over a longer period? Could she get a loan from the affordable housing people?

Just looking for advise from anyone who has experience in this area.

Thanks.

hungryhippo

Rockshamrover wrote: »

He told her that she can keep the house if she can continue to pay the mortgage herself.............The value of the property is less than the amount borrowed so selling is not an option.

I bet he did!!

Why would she agree to this? Half of the negative equity belongs to him.
Why would she want to take his loss upon herself and make a bad situation worse.

IMO, either the house should be sold, and the loss divided accordingly between the 2 parties, or he should make a payment to her equating to half the loss on the value of the property if he wants to wash his hands of the situation.

Conversely, if value of the property had risen, do you think he wouldn't be looking for a slice of that?

LegacyUser

hungryhippo wrote: »

IMO, either the house should be sold, and the loss divided accordingly between the 2 parties, or he should make a payment to her equating to half the loss on the value of the property if he wants to wash his hands of the situation.

Don't be ridiculous/
They've split up. He wasn't married to her.Why should he pay?

The house will be worth alot more in a few years. She can try to renegotiate her mortgage.
Or she can tell him to keep the house.
Or she can find another man to move in.

dudara

Unregistered wrote: »

Don't be ridiculous/
They've split up. He wasn't married to her.Why should he pay?

Because they were both paying 50% on the mortgage.

OP, was the mortgage in both their names?

AngryBadger

Unregistered wrote: »

Don't be ridiculous/
They've split up. He wasn't married to her.Why should he pay?

Because he owns 50 % of the property maybe? The mortgage is a seperate entity from their previous relationship, thus dissolving the relationship doesn't in some way relieve him of his fiscal responsibilities...

I can't believe you needed that explained to you.

OP your friends ex is taking pure advantage here, she should not agree to take over the mortgage on her own.

beth-lou

If she is going to take over ownership of the house, she should buy his half off him, so that it is actually hers and he can't come and claim his half 5 or 10 years down the road when the prices have (hopefully) increased. She shoul dget the place valued and buy it back at half of the valuation, which will basically mean she will have to up what she is paying out, but this can be covered by getting a tenant. She will have to pay stamp duty on the difference though I think. She needs to get professional advice. It might be better for her to sell and pay off the negative equity if it isn't too much. But definetly advise not to just continue paying the mortgage withhis name on it. It has to be sorted legally, or else she will be liable to lose out in the long run.

LegacyUser

AngryBadger wrote: »

Because he owns 50 % of the property maybe? The mortgage is a seperate entity from their previous relationship, thus dissolving the relationship doesn't in some way relieve him of his fiscal responsibilities...

I can't believe you needed that explained to you.

OP your friends ex is taking pure advantage here, she should not agree to take over the mortgage on her own.

So she will reimburse him, with interest when the price of the house goes up?

hungryhippo

Unregistered wrote: »

Don't be ridiculous/
They've split up. He wasn't married to her.Why should he pay?

The house will be worth alot more in a few years.

What is ridiculous about it, and what has whether they were married or not got to do with anything? Relationships/feelings must be set aside and in the cold light of day a joint investment was made in the property. The situation now is that one of the parties wishes to close out there position on this investment.

Regardless whether or not the house will be worth 10fold what it is now in x years (hell of an assumption your making there, given that you have no idea how much was paid, location, etc,etc,etc), the position now is that his share of the investment has made a loss at this point in time and it is at this point in time he is seeking to leave the arrangement.

Waylander

Unregistered wrote: »

So she will reimburse him, with interest when the price of the house goes up?

Why would she, he wants out now, the house is worth what its worth now. They should get a valuation done, and if there is negative equity, then it is half his. This is pretty basic, you should not need it explained to you several times.

STUBBORNGIRL

This is a terrible situation to be in and i feel so sorry for your friend in question. the best advice that should be given here is that she contact her solicitor and get the best legal advice that she can. For what it is worth under no circumstances should she be paying all the rent now with his name on the deeds! She has to go the legal route! her options will be well explained to her by her solicitor.

AngryBadger

Unregistered wrote: »

So she will reimburse him, with interest when the price of the house goes up?

What are you talking about? Why should she have to re-imburse him on anything? Relationship aside their partners on this mortgage with an (I assume) equal share in the responsibility for repayments, why should she suddenly be saddled with the entire mortgage in a market of negative equity?

Caryatnid

OP I know this is not helpful to you or your friend at this stage, but I think it could be appropriate to take the opportunity to highlight the importance of going to a solicitor when buying a house with someone - to agree what to do in this sort of situation.

If he just walks away, and disappears from her life, then she will have to pay his half in order to stay living in the house.

If she wants to keep the house - then lodgers could be the only option. However she can give him the same offer to him and see if he wants this negative equity???

gedas

Sorry to hear this OP.

I had a similar situation just recently.

The bank told us that the only option we had was to sell the property and take personal loans to pay off the difference, fees, and fines for breaching the contract. At the moment the apartment is at least 50 grand less than we paid for. And this was the only option because LEGALLY neither of could afford to pay the mortgage by ourselves. So we decided not to sell it.

Since it was her who decided to break up with me, I said, alright, you can have the appartment. I would've happily stayed, paid my part, and worked on our relationship. But she didn't want any of that. And since we are both reasonable and peaceful people, we decided to do it the nice way. She is paying the mortgage, and I am not paying anything. The only problem with this arrangement is that if she loses her job and becomes unable to pay, I will have to deal with that as well. I hope it doesn't come to that.

Good luck OP, I know how you feel.

IRISH RAIL

Been there myself
OP you need to go to a soliciter negative equity aside if his name is on the mortgage than he has a right to proceeds of the house be it 5 or 50 years down the road, getting a tennant in will only help out not solve the situation.
in 3 weeks you could be all rosy and he might want a party there and he has every right to do this as his name is on the house :eek: sounds crazy well its not.

my advice would be to have a soliciter draw up a contract or something like that where he acknoledges he has given up is rights to claim on the property in lieu of you paying all the mortgage, saying that I doubt the banks will like it very much but do seek legal advice.

dade

gedas wrote: »

She is paying the mortgage, and I am not paying anything. The only problem with this arrangement is that if she loses her job and becomes unable to pay, I will have to deal with that as well. I hope it doesn't come to that.

.

is your name on the mortgage at present? if so my understanding is that you will be liable for any outstanding debt if she can't pay no matter what arrangement you two come up with, you signed on the dotted line so you are liable. also if she defaults and the home repossessed it could effect your credit rating thus hurting any chance you have in the future of setting up. . Also as your name is on the deeds any subsequent property you purchase will be effected in that you would now be considered as owning two properties even if you have no access to one of them. where as if it was sold lock stock and barrel to her then you are now considered a new home owner (not first time buyer)

AngryBadger wrote: »

Because he owns 50 % of the property maybe? The mortgage is a seperate entity from their previous relationship, thus dissolving the relationship doesn't in some way relieve him of his fiscal responsibilities...
.

exactly he is responsible for bearing 50% of the loss in equity in this case just as he'd be rubbing his filthy mitts together if it was in positive equity.

I would think the girl in question would need to get the property revalued to see how much of a loss is involved and then discuss the matter with a financial advisor or her current bank manager to see what can be done. i mean people switch mortgages every day so it may be simply a case of the house being sold by both of them as a pair to her as a single person now only her name is on the deeds.

JDLK

Im not 100% on the options here but it did happen to a friend of mine- they were both paying 50/50, no kids(not sure if that is your friends situation- i believe kids have a bearing on this as its the family home and all).

Basically he spoke to the bank and he was able to get a second mortgage to pay her for her share. Im not sure how they valuated her share but I did hear talk of independant valuations- but that could have just been for him (I know it was worth another 20 grand by the time she wanted to leave)- he paid her off and then the bank merged the 2 mortgages into one. Ok that sounds pretty wierd but I believe he pretty much worked with the bank to resolve it- they had obviously been through this situation before and its better for them to salvage something. Also I think the bank did advise him about letting rooms but fortunately he was able to cover the new payments (or was the last time I spoke to him)

I think there was mention of him having to pay for property in the house which they both invested in like furniture etc they invested alot and I think he came to a settlement for that aswell

DO NOT QUOTE ME

Best off talking to the bank, they dont want to be saddled with another property in the current climate so I reckon they will help her out- they can be surprisingly flexible

If not then I reckon they'd both have to sell and split the loss. She could contact citizens advice in the meantime who can help her out with getting accomodation (if she's at risk from being out on the street like)

John Mason

Have been there myself.

If she wants to keep the house, she needs to get her down to her solcitor immediately and get him off the deeds this imperative because if that house doubles in value tomorrow you can sure as hell guarantee he will be back looking for his 50%. Get everything done correctly and legally.

Then take in a lodger or two and get a second job.

It is hard work but it can be done. You friend can up to €10,000 a year tax free from renting rooms out but she has to stay living there herself


BUT GET LEGAL ADVICE

Rockshamrover

Thanks to everybody for taking the time to give advise, I will pass it on. You are all very kind.