Selling house post seperation.
Discussion
Hi all,
I hope that this is the correct forum for this post as I am looking for some legal/financial advice.
Anyway me and the other half have parted company due to her being a complete muppet. We were not married but we own a house together and are joint mortgage holders. I am now staying with my mum and she is still in the house.
I spoke to her about the house tonight, and she now wishes to buy me out. Sounds fine, I don’t have a problem with this. She did however say that she knows someone who can value it for us/her. Now alarm bells are ringing. I don’t really think that I should trust anyone to value the property who is not completely impartial, or of my choosing. For all I know she could be good friends with this person, who could intentionally undervalue the property. Am I right about thinking this?
As for her buying me out of the property she would need to remortgage. Would the mortgage lender (Nationwide) not want to do their own valuation anyway?
Another thing is that I stumped up the deposit for the house using a personal loan. I know that the house is owned 50:50. So am I right in assuming that this would be irrelevant.
I’m feeling pretty crap about the whole situation but just want to get on with it now.
Thanks for any advice.
I hope that this is the correct forum for this post as I am looking for some legal/financial advice.
Anyway me and the other half have parted company due to her being a complete muppet. We were not married but we own a house together and are joint mortgage holders. I am now staying with my mum and she is still in the house.
I spoke to her about the house tonight, and she now wishes to buy me out. Sounds fine, I don’t have a problem with this. She did however say that she knows someone who can value it for us/her. Now alarm bells are ringing. I don’t really think that I should trust anyone to value the property who is not completely impartial, or of my choosing. For all I know she could be good friends with this person, who could intentionally undervalue the property. Am I right about thinking this?
As for her buying me out of the property she would need to remortgage. Would the mortgage lender (Nationwide) not want to do their own valuation anyway?
Another thing is that I stumped up the deposit for the house using a personal loan. I know that the house is owned 50:50. So am I right in assuming that this would be irrelevant.
I’m feeling pretty crap about the whole situation but just want to get on with it now.
Thanks for any advice.
Marky Boy said:
I spoke to her about the house tonight, and she now wishes to buy me out. Sounds fine, I don’t have a problem with this. She did however say that she knows someone who can value it for us/her. Now alarm bells are ringing. I don’t really think that I should trust anyone to value the property who is not completely impartial, or of my choosing. For all I know she could be good friends with this person, who could intentionally undervalue the property. Am I right about thinking this?
You need to get 2 or 3 valuations form local estate agents. No way on earth should you trust "someone she knows". (They might be completely impartial, but you can't trust her mate).Marky Boy said:
As for her buying me out of the property she would need to remortgage. Would the mortgage lender (Nationwide) not want to do their own valuation anyway?
Yes they would. They might do a desktop valuation. They might do a drive by, or they miught visit. It will dpend on LTV. (and how they feel on the day) Their valuation may well be below what an agent says you could get for the house. If you have your mortgage number handy, you could phone and ask what value the Lender would put on it over the phone (they have a price index)Marky Boy said:
Another thing is that I stumped up the deposit for the house using a personal loan. I know that the house is owned 50:50. So am I right in assuming that this would be irrelevant.
You need to make it opart of the agreement that she pays you half of the deposit over and above your half of the house.If she chooses not to, you're f
ked. After all your loan is not tied to the house in anyway. But you can have that argument with her, dpends how straightforward and upfront you want things to be.
Best of luck.
Unless you had a declaration of trust when you bought the property, the fact you paid the deposit is irrelevant, legally speaking. You could bring it up with her, but it could backfire if she gets uppity about it. You say you took out a loan for the deposit... who paid it back? The reason I say this is that if you didn't divide all the other bills 50:50 and keep your finances separate she could say she effectively paid the loan back just as much as you did (e.g. you have less cash now because you paid the loan, she has less cash now because she paid the electricity). This is what a declaration of trust is for - if you want the money back afterwards, you need one.
The valuation I would definitely not be entrusting to her mate. Get 3 or more independent valuations and agree beforehand to go with the average - it's fairer for both of you. Don't let her do the valuation and then ask for more if you're not happy with the result - it will only antagonise her. Be prepared for the lender to undervalue the property, as said above. At the end of the day, if they do this it's pointless arguing the toss with her - she's hardly likely to agree to increase her debt loading to give you more cash, assuming she even has the cash to do it given the reduced mortgage.
Overall, use some emotional intelligence. Pushing too far can backfire spectacularly, so only do it if it makes a big difference to your future. Good luck!
The valuation I would definitely not be entrusting to her mate. Get 3 or more independent valuations and agree beforehand to go with the average - it's fairer for both of you. Don't let her do the valuation and then ask for more if you're not happy with the result - it will only antagonise her. Be prepared for the lender to undervalue the property, as said above. At the end of the day, if they do this it's pointless arguing the toss with her - she's hardly likely to agree to increase her debt loading to give you more cash, assuming she even has the cash to do it given the reduced mortgage.
Overall, use some emotional intelligence. Pushing too far can backfire spectacularly, so only do it if it makes a big difference to your future. Good luck!
Thanks for the advice chaps. It’s much appreciated.
It’s all a bit up in the air right now as I thought that we might have been able to sort things out between us. Alas this hasn’t happened because she is just not thinking this through and has decided to act like a child. Anyway enough of that.
As for the house I have told her to forget getting it valued by the third party. By my calculations the redemption on the current mortgage is going to be pretty much the same as the property value, possibly less. Obviously if things continue down this route I will have my own valuations performed.
I have told her to speak to the mortgage lender in the first instance. Hopefully when she discusses this with them she will realise that this just isn’t going to happen anyway. The mortgage is currently tracking 2% above the base rate so would appear affordable at the moment, but this will obviously change when she remortgages. Also with little or no equity in the property, and no deposit, I think she will struggle to even secure finance. In which case the house would just have to be sold on the open market.
Does anyone know what happens if the house turns out to be in negative equity here? Even if it is I doubt it will be more than a couple of thousand. Will the mortgage lender block the sale of the house or will I just maintain a liability to them to pay off the difference?
As for the deposit I thought that was the case. I’m not going to argue the toss about that as I just want rid at the moment, and don’t wish to be dragged into an argument.
Ho hum anyway, onwards and upwards and all that.
It’s all a bit up in the air right now as I thought that we might have been able to sort things out between us. Alas this hasn’t happened because she is just not thinking this through and has decided to act like a child. Anyway enough of that.
As for the house I have told her to forget getting it valued by the third party. By my calculations the redemption on the current mortgage is going to be pretty much the same as the property value, possibly less. Obviously if things continue down this route I will have my own valuations performed.
I have told her to speak to the mortgage lender in the first instance. Hopefully when she discusses this with them she will realise that this just isn’t going to happen anyway. The mortgage is currently tracking 2% above the base rate so would appear affordable at the moment, but this will obviously change when she remortgages. Also with little or no equity in the property, and no deposit, I think she will struggle to even secure finance. In which case the house would just have to be sold on the open market.
Does anyone know what happens if the house turns out to be in negative equity here? Even if it is I doubt it will be more than a couple of thousand. Will the mortgage lender block the sale of the house or will I just maintain a liability to them to pay off the difference?
As for the deposit I thought that was the case. I’m not going to argue the toss about that as I just want rid at the moment, and don’t wish to be dragged into an argument.
Ho hum anyway, onwards and upwards and all that.
Marky Boy said:
Does anyone know what happens if the house turns out to be in negative equity here? Even if it is I doubt it will be more than a couple of thousand. Will the mortgage lender block the sale of the house or will I just maintain a liability to them to pay off the difference?
The difference will need to be paid somehow - either cash to make it up, or I've read (on MSE) that in some cases the lender will run an unsecured loan to pay it off over time.Short of external influence (e.g. a relative giving her the money) it sounds like she isn't going to be remortgaging. I've not had to do it before, if she had sufficient deposit would she definitely need to remortgage? i.e. might the lender be prepared to just transfer the existing mortgage into her name? If there's barely any equity that would seem a sensible option.
I’m not sure if the lender would let her just transfer my share into her name? Is it possible to do this? I was assuming that the lender would require her to take a new mortgage to pay off the old one.
The mortgage would be 3.5x her salary however, so it would depend on their calculations whether she could afford it I suppose.
The mortgage would be 3.5x her salary however, so it would depend on their calculations whether she could afford it I suppose.
Marky Boy said:
I’m not sure if the lender would let her just transfer my share into her name? Is it possible to do this? I was assuming that the lender would require her to take a new mortgage to pay off the old one.
The mortgage would be 3.5x her salary however, so it would depend on their calculations whether she could afford it I suppose.
Assuming her credit score is fine then she will be able to take over your share no problem. The mortgage would be 3.5x her salary however, so it would depend on their calculations whether she could afford it I suppose.
They will not require a new mortgage.
Depending on the cost of the property & size of the mortgage she may have a stamp duty liability.
scotal said:
Assuming her credit score is fine then she will be able to take over your share no problem.
They will not require a new mortgage.
Depending on the cost of the property & size of the mortgage she may have a stamp duty liability.
I have told her to go speak to the building society, so hopefully this will be the case. This however assumes no equity so I dare say I will still require a valuation to make sure that I'm getting market value, and not just what the mortgage company says.They will not require a new mortgage.
Depending on the cost of the property & size of the mortgage she may have a stamp duty liability.
Edited by Marky Boy on Tuesday 16th March 13:36
Edited by Marky Boy on Tuesday 16th March 13:39
It honestly sounds like you've got your head screwed on over this, you've said all the right things.
'Valuation' is a ruddy tough one, it's worth what somebody will pay for it, not what an agent says they'll get for you, or what a mortgage company will lend against it.
The most fair appraisal would be valuations from as many agents as possible, discount the highest, discount the lowest, and take the average of what's left.
Best of luck, and as you say, onwards and upwards!
'Valuation' is a ruddy tough one, it's worth what somebody will pay for it, not what an agent says they'll get for you, or what a mortgage company will lend against it.
The most fair appraisal would be valuations from as many agents as possible, discount the highest, discount the lowest, and take the average of what's left.
Best of luck, and as you say, onwards and upwards!
maser_spyder said:
It honestly sounds like you've got your head screwed on over this, you've said all the right things.
Thanks for that mate. It's a bit of a crap situation to be in and one I’m not particularly familiar with. It’s just good to hear from some else that I’m going about this the correct way.Thanks to all for your advice and I’ll keep you all posted.
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