Do I need a deposit to buy out an ex?

Discussion in 'Issues arising from joint mortgages' started by Fixel7, Feb 2, 2018.

  1. Fixel7

    Fixel7 New Member

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    Hi folks,

    After years of being stuck in a negative equity situation, I’m finally in a position to buy out my ex.

    The mortgage is in both names, the house has been rented and we’ve both contributed equally to the upkeep of the property. The house is now at break even point. Never been in arrears.

    I’m just wondering, if I was to buy out my ex, will the bank require I have a 20% deoposit to do so?

    Just to be clear, I meet all the central bank guidelines to take on the full mortgage (sufficient income, no other debt) and I have 10% of the mortgage balance in cash if required.

    But I’m not sure what deposit would be required in this scenario - I would not be able to source the 20%.

    If anyone who has done this could shed some light I’d really appreciate it.
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    33,992
    Which bank?
    How much is the mortgage?
    Is it a tracker?

    If the total mortgage is less than 3.5 times your income, they will probably let you do it.

    You should not mention the 10% cash to them at all. If they refuse you and tell you that it's too much relative to your income, then you could offer to reduce the amount.

    Brendan
     
  3. Fixel7

    Fixel7 New Member

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    2
    Hi Brendan,

    Thanks for the reply. The balance on the mortgage is €240K and the house is worth the same. It’s with PTSB and it is a tracker, not a great one though. It’s 2.25%.
     
  4. Brendan Burgess

    Brendan Burgess Founder

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    If you have an income of €75k , they probably will allow you to take over the mortgage.

    Brendan
     
  5. RedOnion

    RedOnion Frequent Poster

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    As far as I know, CB rules don't apply, as it's not new lending.

    Note: you will lose the tracker rate on the half you're taking over. Make sure any extra payment you make goes to that half!

    You'll have to pay stamp duty on the half of property you're taking over, and you'll both incur legal fees.
     
  6. Brendan Burgess

    Brendan Burgess Founder

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    Possibly, but not necessarily.

    AIB, for example, has paid refunds and compensation to people who were "deprived" of their tracker this way.

    Brendan
     
  7. RedOnion

    RedOnion Frequent Poster

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    Last edited: Feb 2, 2018
    I'm very surprised that they have, unless they had removed the entire tracker.

    Edit: right I see there are cases where trackers have been reinstated, and certain banks have allowed customers to keep tracker.
    However, I'd suggest that in all probability the bank would remove the tracker if they've learned anything!
     
    Last edited: Feb 2, 2018
  8. xoxoxo

    xoxoxo Frequent Poster

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    I bought my ex out and kept the tracker.
    I didn't pay stamp duty or CAT as the transfer was the family home and we were married
     
  9. Brendan Burgess

    Brendan Burgess Founder

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    On the contrary, if they have learned anything, they would let him keep the tracker.
     
  10. Sionnachy

    Sionnachy New Member

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    Is your ex happy that you buy him/her out? Have you made any agreement with him/her in relation to what they will walk away with if there is little or no equity in the house? Until you are both in agreement on these things it's difficult to see what route is best. Probably no harm talking to your bank in the meantime to see how much they will lend you on your own. Get everything in writing from the bank if they say you can keep the tracker. I've been through the process so feel free to PM me any questions. I had to reduce the balance of the mortgage, pay him half the equity, pay stamp duty of 1% on the value of his half of the equity and pay legal fees. It was a very expensive and stressful process but worth it in the long run.