Cohabiting break up - buying out options

N

nailler

Guest
Hi - new to board, had a search couldn't easily find similar threads.

Looking for some advice. Myself and my partner recently split up (messy). We have a property together which needs to be sorted. They are amicable people so it should go down 50/50 no worries if sold. But I'm thinking hey maybe I could buy it out, whats involved, anyone been down this route? The property was bought 2 years ago for 380k with a mortgage of 350k. I understand the property would need to be valued etc etc, but what type of figures would I be looking at for a buy out?

Also is it a bad idea to start talking to the bank where we have our mortgage about the options or do they get freaked out that there's trouble on that mortgage a/c?

And I should add, I'm probably just about to quit a permanent job to go into contracting work - do the banks not like this at all, like anyone had that experience do they look unfavourably on you because its irregular income etc?
 
you have asked how much it will cost to buy the other half out and yet you still dont know the current value of the property? If it is worth say 500k and outstanding mortgage is 350 then by my calculation you will have to pay your partner 75k.and take over the remainder of the mortgage. The bank may not be happy with you taking out a further mortgage of 75k giving you a total of 425k (unless you earn about 90k!!)it may be alot easier to sell and split profit.
 
Thanks - sorry yes should have intimated what it might be worth now.

Yeah spoke to a few mortgage brokers and buy out don't seem like an option unfortunately. I am going to do the lottar tonight though :)

Thanks for your replies.
 
Hi Nailler

There are quite a few creative options open to you. None might work, but you should investigate them all if you like the house and want to keep it.

1) Buy your partner's share of the house. The cost to you will be €250k. His mortgage is €175k, so you will have to keep his share of the mortgage and borrow a further €75k. Correction: There is no stamp duty on your purchase of the balance of the house as you were a first time buyer when you bought your first interest in it.

You should keep your permanent job for the moment if possible as it will make the bank more comfortable in dealing with you.

You should speak to your current lender who would be the most likely to grant you such an increase.

2) If you are getting on well with your ex-partner, and if he is not buying a house immediately, he may be happy to retain his interest until he is ready to buy a house. That way he retains a foothold in the property market.

When he is ready to buy a house, the sums may have changed. The house may have fallen in value, in which case you won't have to borrow so much. You may have got a salary increase which might help you stretch to the mortgage.

3) If he insists on selling now, can you find someone else to buy his half of the house? You will be in the same position as before, except that you will now be sharing with a co-owner rather than with a partner.

3a) Can you find somone who is looking for a property investment to buy out your partner? You would have to pay them some form of rent for their half of the house but you could get this by renting a room.

Brendan
 
Hi there,

you need to see the value of the house and divide it by two. If this amount is below 317,500 you will be still FTB and exempt from Stamp duty.
 
monia said:
Hi there,

you need to see the value of the house and divide it by two. If this amount is below 317,500 you will be still FTB and exempt from Stamp duty.
Click to expand...

As they are not married they will not be classed as FTBs for stamp duty purposes
Marriage breakups are treated differently
 
From Revenue website


What is the position where a person, who had obtained first time buyer relief on the joint purchase of a house with another first time buyer, subsequently acquires the other joint owners interest in the house?

A person who obtained first time buyer relief on the purchase of an interest in a house would not be precluded from obtaining first time buyer relief on a subsequent purchase of another interest in the same house provided that person has not purchased another house or part of another house in the intervening period.


mf
 
Charlie,

I am in the same position (not married and guy splitted up). I have called revenues and they have confirmed that if the amount is below 317,500 I am still a FTB and exempt from Stamp duty.

Monia
 
Thank you all for that correction. It's great to learn something as important as that. I have been advising people incorrectly for ages on this.

Brendan
 
monia said:
Charlie,

I am in the same position (not married and guy splitted up). I have called revenues and they have confirmed that if the amount is below 317,500 I am still a FTB and exempt from Stamp duty.

Monia
Click to expand...

Sorry made a mistake - glad to hear it is this way
 
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