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Relationship ended and trying to have name taken off mortgage

  • 03-02-2011 4:02pm
    #1
    nursesuniform
    Closed Accounts Posts: 1 ✭


    Hi,

    What would happen in the hypothetical scenario if a couple who shared a mortgage on a house, ended their relationship.

    One of the couple moves out but continues to pay their share of the mortgage for several months, even though they want nothing more to do with their ex partner or indeed the property which is now in negative equity.

    What avenues if any can this person take to have their name taken off the mortgage, other than been "bought out" as neither party can afford this........?

    Hypothetically speaking of course:)

    Thank you in advance
    Tagged:


Comments

  • #2
    chopser
    Registered Users, Registered Users 2 Posts: 269 ✭✭chopser


    If they borrrowed money together to buy a house then they can't get your name taken off it without full repayment.
    If they cannot afford to buy the other person out then I doubt they can afford the full amount to the bank.

    I'm afraid they are very much stuck.


  • #3
    Nozebleed
    Registered Users, Registered Users 2 Posts: 1,727 ✭✭✭Nozebleed


    sell the house and take the financial hit. its the only option.


  • #4
    seamus
    Registered Users, Registered Users 2 Posts: 68,317 ✭✭✭✭seamus


    Let's call the person staying, person A, and the person leaving, person B.

    Imagine the house is in negative equity to the tune of €50,000.

    This means that you were to try and clear the mortgage now, you would need to sell the house and both parties together pay the bank €50k.

    In order for person B to have their name taken off the mortgage, they will need to pay the bank €25k (their half of the negative equity), and person A will need to pay the bank €25k and person A will need to apply to the bank to have their mortgage extended to cover 100% of the mortgage.

    In extenuating circumstances, and assuming person A has sufficient income, the bank may provide a mortgage for 100% of the house value + 50% of the current negative equity, but this is very unlikely.
    More than likely person B will need to pay person A 50% of the negative equity, person A will then have to add the other 50% of the negative equity to that as well as 10% of the house value, in order to obtain a mortage for the remaining 90% of the house value.

    Person A does not need to "buy out" person B, rather person B needs to "buy out" of the mortgage.

    The only reasonable option if you both want "out" is as Nozebleed says - arrange with the bank to sell the house and then each party gets a personal loan (or credit union or whatever they want) to cover 50% of the mortgage shortfall.


  • #5
    source
    Registered Users, Registered Users 2 Posts: 5,303 ✭✭✭source


    Or another option is for both parties to move out and treat the property as a business, renting out the house or rooms in the house to pay the mortgage until one party can afford to buy out the other party.

    I just bought a house with my other half which gladly is worth more than we paid for it. We organised a contract with our solicitor that if we were to break up the house would be sold and any proceeds will be split 50/50, likewise any debt on the house would be split in a similar fashion. My belief is that when it comes to a couple buying a house an agreement like this should be organised.


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