Buying out X, what to expect?

Johnny Bitte

Hi all,
I have begun the process of buying out the ex of our mortgage and just want to know what to expect.

I have contacted the mortgage provider who ask us to send in a letter requesting the mortgage to be transferred into my name and it had to be signed by both of us.

My guess is after this they will request bank statements and payslips from me to be sure I can cover it.

If the ok it, they send out documentation that needs to be signed by me to agree to the new mortgage and to her to sign over her entitlement.

I assume this needs to be looked over by separate solicitors for each of us.

Once signed and sent back the mortgage company the deal is done and the house is mine!

Is there anything major I'm missing from this?

I really don't want to be caught with my pants down.

Thanks

John Mason

If you are in negative equity there could be issues with you getting a new mortgage.

i have a family member who cannot getting his ex's name off the mortgage due to negative equity. he has been paying the mortgage by himself for the last 2 years but this doesnt seem to matter to the bank

Johnny Bitte

irishbird wrote: »

If you are in negative equity there could be issues with you getting a new mortgage.

i have a family member who cannot getting his ex's name off the mortgage due to negative equity. he has been paying the mortgage by himself for the last 2 years but this doesnt seem to matter to the bank

****, thats the exact situation here : (

liger

Is your ex able to pay for her share of the neg equity?

If your willing to take on her share of the neg equity and can afford the mortgage then the bank you are with at the moment will be your only option to get a new motgage for this house.

Johnny Bitte

liger wrote: »

Is your ex able to pay for her share of the neg equity?

If your willing to take on her share of the neg equity and can afford the mortgage then the bank you are with at the moment will be your only option to get a new motgage for this house.

She cant even pay her half of the mortgage.

But yes, I am willing to take on her half of the neg equity.

TYhe question is will the bank try to screw me with interest if I'm a bigger risk?

Does the process above seem right to yeah guys?

iguana

Ok, I could be being excessively negative but this is what I have heard anecdotally. And it's best for you to be prepared for any possible hurdles.

It's unlikely the bank will change the mortgage if it is in NE. Do you have any idea how much NE the property is in? The bank will probably want a lump sum for this amount before they take her name off the mortgage. They may also want a sum which will cover 10-20% of the current value of the house so the new mortgage is an 80-90% mortgage as opposed to 100%. If you take out a loan to pay this they will calculate your monthly loan repayments as a deduction from your income when they are working out if your salary is enough to give you a new mortgage in your name only.

If you do manage to get a mortgage in your name only you will be put onto whatever type of interest rate they are currently giving out which may well be less favourable than the one you are currently on.

Johnny Bitte

iguana wrote: »

Ok, I could be being excessively negative but this is what I have heard anecdotally. And it's best for you to be prepared for any possible hurdles.

It's unlikely the bank will change the mortgage if it is in NE. Do you have any idea how much NE the property is in? The bank will probably want a lump sum for this amount before they take her name off the mortgage. They may also want a sum which will cover 10-20% of the current value of the house so the new mortgage is an 80-90% mortgage as opposed to 100%. If you take out a loan to pay this they will calculate your monthly loan repayments as a deduction from your income when they are working out if your salary is enough to give you a new mortgage in your name only.

If you do manage to get a mortgage in your name only you will be put onto whatever type of interest rate they are currently giving out which may well be less favourable than the one you are currently on.

Holy crap! So basically this isn't happening.

Would the be any alternative way to sort this.
Like if she signed a contract stating she had no claim to the house? That way she can't come back in a year for money even though her name is on the mortgage?

John Mason

The_Goose135 wrote: »

Holy crap! So basically this isn't happening.

Would the be any alternative way to sort this.
Like if she signed a contract stating she had no claim to the house? That way she can't come back in a year for money even though her name is on the mortgage?

you can both go to a solicitor and get an agreement drawdown up stating that she had no right to the house but tbh this is not worth the paper is its writing on.

my family member has this with his ex but she has told everyone its her pension and she will be getting half the profit in 20 years time !!!!

iguana

The_Goose135 wrote: »

Holy crap! So basically this isn't happening.

It's still worth pursuing as you might have a different experience but it's worth being prepared for what I've outlined. The thing is to the bank it isn't just you taking over the old mortgage, it's a brand new mortgage taken out after the original is redeemed.

Bear in mind, she is liable for half the NE. Why are you content to take on that debt for her? If things were the other way around and the house was worth more now would she be so content to walk away from her share of the profit?

If the property is in €20k NE, for example, she owes you €10k if you take on the whole debt. She may have to take out a loan for that amount which will then mean you will have to repay less to the bank which will make it much more likely that you can take on the loan yourself. Whatever repayments she has to make on the loan have absolutely nothing to do with you and won't count against you in getting the new mortgage. You really need to make her responsible for he share of the debt if you are to have a realistic shot at taking on the mortgage yourself.

Johnny Bitte

iguana wrote: »

It's still worth pursuing as you might have a different experience but it's worth being prepared for what I've outlined. The thing is to the bank it isn't just you taking over the old mortgage, it's a brand new mortgage taken out after the original is redeemed.

Bear in mind, she is liable for half the NE. Why are you content to take on that debt for her? If things were the other way around and the house was worth more now would she be so content to walk away from her share of the profit?

If the property is in €20k NE, for example, she owes you €10k if you take on the whole debt. She may have to take out a loan for that amount which will then mean you will have to repay less to the bank which will make it much more likely that you can take on the loan yourself. Whatever repayments she has to make on the loan have absolutely nothing to do with you and won't count against you in getting the new mortgage. You really need to make her responsible for he share of the debt if you are to have a realistic shot at taking on the mortgage yourself.

The thing is she has no money and no chance of getting it, but she did borrow 10k to do up the house when we moved in, including furniture, appliances etc.So I guess I could say leave that to cover the negative equity.

NE is around 13k

If I take over myself, I figured at least I would saved the money I put in,
I get a house that I have no intention of selling for a long time.
Plus, I want her out of my life asap. (Not the best reason, but one none the less.

If I don't buy, we'll have to sell which will mean both of us losing out.

I remember almost a year ago being on here justifying, buying the house to all the nay sayers.
**** why didn't we rent!:mad:

Johnny Bitte

irishbird wrote: »

you can both go to a solicitor and get an agreement drawdown up stating that she had no right to the house but tbh this is not worth the paper is its writing on.

my family member has this with his ex but she has told everyone its her pension and she will be getting half the profit in 20 years time !!!!

So the mortgage agreement would supersede the new contract, which is awful.:eek:

John Mason

The_Goose135 wrote: »

So the mortgage agreement would supersede the new contract, which is awful.:eek:

half the country is in this state judging by the posts on here, i would think or hope that a change in policy is coming but go and get yourself some legal advice and get an agreement drawn up, so at least you have something in writing as back up in case it does go down the legal route and start getting together all your bank statements and receipts showing what you have paid

dearg lady

If I was in your shoes I'd deffo consider selling, 13k NE is really not much in the grand scheme of things, yis would get a personal loan each for that split, It might be the easiest way to make a clean break too. It's a lousy situation to be in, best of luck whatever you decide

Jo King

The best thing to do is leave her name on the deeds. Draw up an agreement with her where she is independently legally advised that she renounces her claim to the proceeds of any future sale of the property and that you indemnify her for any liabilities which she accrues as a result of continuing on title. The agreement should be properly drawn up with solicitors acting for each of you and an agreed valuation report should be obtained and included.

The_Conductor

The_Goose135 wrote: »

The thing is she has no money and no chance of getting it, but she did borrow 10k to do up the house when we moved in, including furniture, appliances etc.So I guess I could say leave that to cover the negative equity.

NE is around 13k

If I take over myself, I figured at least I would saved the money I put in,
I get a house that I have no intention of selling for a long time.
Plus, I want her out of my life asap. (Not the best reason, but one none the less.

If I don't buy, we'll have to sell which will mean both of us losing out.

I remember almost a year ago being on here justifying, buying the house to all the nay sayers.
**** why didn't we rent!:mad:

A few things here-

1. Its not your perogative to absolve your ex of her negative equity in the property- its entirely at the discretion of the bank whether they will accept this.

2. 13k negative equity? I have no idea where the property is- but 13k to me sounds like incredibly wishful thinking. Its not up to you to put a value on the property- the bank would insist on having an official revaluation of the property done.

3. As per the posters above- you are not simply taking over her rights in the property.

a- Legally the property is being transferred into your name, and the deeds modified accordingly.
b- the current mortgage is being paid back in full, and a new mortgage would be issued with you as the sole signatory.
c- you loose any tracker mortgage etc you may have, and would have to accept whatever the prevailing rates were that a bank might offer
d- currently there are very few institutions who would be willing to offer a greater than 80% of the LTV of the property. You would be obliged to figure out where to get the other 20% from, in addition to the repaying the current negative equity that you'd also be taking on.
e- I'm genuinely curious- how are you figuring that your negative equity is only 13k?
f- She could come back with a demand for cognisance of her exhausting her first time buyer status- which might need to be factored into the equation also.

If you want her out of your life- perhaps the better course of action might be to bite the bullet and sell?

the_syco

smccarrick wrote: »

If you want her out of your life- perhaps the better course of action might be to bite the bullet and sell?

Agreed.

irishbird wrote: »

my family member has this with his ex but she has told everyone its her pension and she will be getting half the profit in 20 years time !!!!

Esp if she's anything like this one!

derdider

About 18 months ago i went in to get my dads name off my mortgage and have the mortgage entirely in my name. I had to pay legal fees and stamp duty on the half the house i was taking on....

Just some extra costs to bear in mind..... Havent heard anyone else mention stamp duty yet so dont know if it was something peculiar in my case but i had to pay it anyway

The_Conductor

derdider wrote: »

About 18 months ago i went in to get my dads name off my mortgage and have the mortgage entirely in my name. I had to pay legal fees and stamp duty on the half the house i was taking on....

Just some extra costs to bear in mind..... Havent heard anyone else mention stamp duty yet so dont know if it was something peculiar in my case but i had to pay it anyway

A partner (or an ex-partner) is treated differently than a parent would be. This is why parents would normally have acted as guarantors on mortgages, not purchased the property with their children........

liger

derdider wrote: »

Havent heard anyone else mention stamp duty yet so dont know if it was something peculiar in my case but i had to pay it anyway

If OP is FTB for this house and buys out the ex then he will be excempt from Stamp duty once its his main residence.

Best to get into your bank and speak to a Relationship manager. DO NOT DEAL WITH A CUSTOMER ADVISOR!!! these seem to have sales targets and wont bother doing anything for you.

I had house, 210k on the mortgage and the bank would only let me take over 190k of the debt. but said if i could show i was paying the mortgage from my sole account for next 6 months then i could take over the full 210k. Had the house up for sale, got an offer and sold it for 180k and had to pay 15.5k to clear my share of mortgage and was much much happier.

Johnny Bitte

the_syco wrote: »

Agreed.
Esp if she's anything like this one!

Not now but give her a year when all feeling's of loyalty or fairness fade and her new cock is telling her to get the money :mad:

Jo King The best thing to do is leave her name on the deeds. Draw up an agreement with her where she is independently legally advised that she renounces her claim to the proceeds of any future sale of the property and that you indemnify her for any liabilities which she accrues as a result of continuing on title. The agreement should be properly drawn up with solicitors acting for each of you and an agreed valuation report should be obtained and included.

Last thing I would need in 5 years is being dragged into court over her claim to half the house and it turns out the mortgage supersedes the contract! :eek:


The NE quoted is a rough estimate, of course the bank would have to get a proper quote and of it will affect my decision if it is bigger!

Thanks for all your advice guys.

My head is spinning at the moment and I was convinced we were selling and then I was buying and now I think we should sell.
She is just interested in getting money to pay off the furniture loan, does not give a fly f**k about the mortgage and that way I have to take care of it.

Honestly I just wanted her out of the house. To be paying for a house for your ex to be doing god know's what in it is horrible.

When she heard I would buy her off, it was "I'll be out in 2 weeks"!

These things take time and time will give me a chance to get my head straight.

There is no way she will be giving me money to cover the loss so we will probably seel.

The problem is, who is going to be paying the mortgage while it sits on the market for the next 6 months, muggins here :mad:

dearg lady

If you price it to sell it should go quickly, so many peopel still have crazy ideas of what houses are worth. price it low enough, it'll sell, may lead to higher NE but I dunno., seems like lesser of two evils now.

rossc007

I went through a similar situation. The bank wanted me to buy the house and pay stamp duty!

Talk to your solicitor about a "Deed of Waiver".

Regards
Ross

Johnny Bitte

I know it could be worse and I'm grateful to be in a position to even have a house but for the love of god someone just swoop in and save me! Superman, where are ya!

Bah! We will sell, its very likely our only option if the bank say no, increase the mortgage rate, stamp duty comes in or something else is thrown a 100 miles an hour at my head.

Pricing to sell doesnt bother me but lady muck might scream bloody murder.

Ah, its great coming looking for property advice only to end up in a personal issue's thread.

Anyway, we are with ICS Building society which don't appear to have branches. I'll see what they respond with but as I said, once she's out of the house it will make things a lot easier!