Buying daughters partner out of house
Discussion
Hi. Looking for some advice
Daughter and partner are splitting up house is a modest terrace probs 250k in value
He’s happy to go for a small amount which is amicable so far
However what happens next with the mortgage?
House has around 10 percent in equity
Been in it arounnd 18 months
What would be her next steps
Bills will be a struggle but we’d help her as much as we could do
Really appreciate advice as it’s all alien to me this.
Daughter and partner are splitting up house is a modest terrace probs 250k in value
He’s happy to go for a small amount which is amicable so far
However what happens next with the mortgage?
House has around 10 percent in equity
Been in it arounnd 18 months
What would be her next steps
Bills will be a struggle but we’d help her as much as we could do
Really appreciate advice as it’s all alien to me this.
The first thing to check is that she has the income to support thr mortgage alone once the bf has been paid out what he is due / wants. If she doesnt have the income im the eyes of the lender then either one of you will have to go on the mortgage as guarantors, or she will need to raise more equity to reduce the amount of the loan or ultimately they may have to sell instead, split the proceeds and both start again.
Assuming she can continue with the mortgage then they both need to contact their lender and apply for a 2 to 1 transfer of equity (both names into just her name). They will need a solicitor to help with that which would be part of a remortgage with them, or indeed a new lender if she wants to switch at the same time. The lender can help with recomending a solicitor and will usually have one on the remortgage panel they would want you to use.
Theres and additional legal and lender fee to pay too for the transfer of equity.
Assuming she can continue with the mortgage then they both need to contact their lender and apply for a 2 to 1 transfer of equity (both names into just her name). They will need a solicitor to help with that which would be part of a remortgage with them, or indeed a new lender if she wants to switch at the same time. The lender can help with recomending a solicitor and will usually have one on the remortgage panel they would want you to use.
Theres and additional legal and lender fee to pay too for the transfer of equity.
Edited by AdamV12V on Friday 7th April 08:51
Yes here wages can cover the mortgage.
With about 400 to spare.
Well buy him out and it’s a small amount
So in a way it’s better now than later when there’s a lot more equity and no kids
Already looked on spare room and there demand and the spare rooms quite big
And the house is a lovely terrace in the countryside
So we’re hopeful if she can over the mortgage get a lodger in and I’ll do the upkeep and the mrs the emotional side of things.
She’s given up everything friends family jobs to move away and he’s just
Stayed as he is.
He still thinks he’s 18 and way to hedonistic a lifestyle That’s incompatible
He just lives for getting boozed up and worse
I don’t wish him any harm and
I hope he finds what he’s looking for
Bloody shame for the lad
We’re still in the house we bought 25 years ago so it’s quite alien to us this scenario.
I’m just trying to think of potential pitfalls with the help of you guys.
Thank you.
With about 400 to spare.
Well buy him out and it’s a small amount
So in a way it’s better now than later when there’s a lot more equity and no kids
Already looked on spare room and there demand and the spare rooms quite big
And the house is a lovely terrace in the countryside
So we’re hopeful if she can over the mortgage get a lodger in and I’ll do the upkeep and the mrs the emotional side of things.
She’s given up everything friends family jobs to move away and he’s just
Stayed as he is.
He still thinks he’s 18 and way to hedonistic a lifestyle That’s incompatible
He just lives for getting boozed up and worse
I don’t wish him any harm and
I hope he finds what he’s looking for
Bloody shame for the lad
We’re still in the house we bought 25 years ago so it’s quite alien to us this scenario.
I’m just trying to think of potential pitfalls with the help of you guys.
Thank you.
Only 400 after the mortgage alone...
How will she heat the house, pay council tax, feed herself and still have a social life let alone any bills for when things go wrong... car, boiler etc.
Either bank of dad better be open or its best to sell up and move back home to her friends and start again.
Unfortunately for you that means your days of walking about naked again will be over
How will she heat the house, pay council tax, feed herself and still have a social life let alone any bills for when things go wrong... car, boiler etc.
Either bank of dad better be open or its best to sell up and move back home to her friends and start again.
Unfortunately for you that means your days of walking about naked again will be over
In terms of the cover for the mortgage. I don’t think it’s a question of having 400 left over each month. This is only partly what the mortgage company assess.
It’s if the house is 250 @ 10% equity then she will need to be able to get a mortgage for 225k by herself which might require a 225/5 = 45k salary assuming a lender that will lend at 5x single salary and that there are no other loans (car, student etc)
It’s if the house is 250 @ 10% equity then she will need to be able to get a mortgage for 225k by herself which might require a 225/5 = 45k salary assuming a lender that will lend at 5x single salary and that there are no other loans (car, student etc)
£400 left doesn't sound much, but in the end it's going to come down to how the lender sees that, not you, her or any of us here...
As part of the remortgage ToE into her sole name, she will have to go through the usual mortgage affordability checks against her income. So if the lender decides £400 residual income isn't enough then the whole thing will become a no-go, but that's where adding parents as guarantors onto the mortgage comes in. Basically you are signing up to say you will legally cover the debt should be default.
So you should probably decide if you're able and willing to do that, and go in to see the lender with her to do an initial check on their affordability calculations.
Assuming it is doable, then when the time comes to actually start the remortgage ToE application, both she and the bf will both have to apply and sign the papers, so it's essential she and you try to maintain the best relations with him until everything is completed.
As part of the remortgage ToE into her sole name, she will have to go through the usual mortgage affordability checks against her income. So if the lender decides £400 residual income isn't enough then the whole thing will become a no-go, but that's where adding parents as guarantors onto the mortgage comes in. Basically you are signing up to say you will legally cover the debt should be default.
So you should probably decide if you're able and willing to do that, and go in to see the lender with her to do an initial check on their affordability calculations.
Assuming it is doable, then when the time comes to actually start the remortgage ToE application, both she and the bf will both have to apply and sign the papers, so it's essential she and you try to maintain the best relations with him until everything is completed.
Edited by AdamV12V on Friday 7th April 10:13
I’d like to stay off it if I can
And the lodger and is helping should get
Her over the line money wise
Her jobs stable (I did a credit check on them at work)
It’ll all be down to the
Bank I suppose
If I go on the mortgage. How do I come off it in future.
We were kind of hoping thst keep it a couple of years get more equity and possibly an interest only for a few years.
Current deal is 3.69 percent 34 years left not sure. How long the introductory bit has left
And the lodger and is helping should get
Her over the line money wise
Her jobs stable (I did a credit check on them at work)
It’ll all be down to the
Bank I suppose
If I go on the mortgage. How do I come off it in future.
We were kind of hoping thst keep it a couple of years get more equity and possibly an interest only for a few years.
Current deal is 3.69 percent 34 years left not sure. How long the introductory bit has left
I’ve told her to sell it now and have done
Sounds a good deal at first thoughts but more you look into it.
Selling it now Thry get 7-10k each after everything’s done
Reason is the exit fees on this mortgage then the new one with a higher rate and the values going down a little
Plus if she keeps it for say a Year it’ll cost us 12k on assistance. And 6-7k each year after.
We can’t do that forever it’s going to restrict our plans quite abit and she’s no hope of doubling her salary in the next year or two so we don’t have to help her.
Then to eventually sell it when we can’t keep helping her is just kicking it down the road and it’ll leave her fully liable for any problems the house could have, and of course early repayment fees
Ultimately it’s all living in the land of it’s and buts, and we like to know where we’re going and what we’re doing.
She will get 100 percent of the profit of course but that’s only cos we’ve banked rolled it at our cost. And don’t want any money back. If we did then She is where she is now in terms of profit.
So it seems kind of pointless to delay the inevitable selling of it and any profit would be because we’ve paid towards the upkeep of it.
Sounds a good deal at first thoughts but more you look into it.
Selling it now Thry get 7-10k each after everything’s done
Reason is the exit fees on this mortgage then the new one with a higher rate and the values going down a little
Plus if she keeps it for say a Year it’ll cost us 12k on assistance. And 6-7k each year after.
We can’t do that forever it’s going to restrict our plans quite abit and she’s no hope of doubling her salary in the next year or two so we don’t have to help her.
Then to eventually sell it when we can’t keep helping her is just kicking it down the road and it’ll leave her fully liable for any problems the house could have, and of course early repayment fees
Ultimately it’s all living in the land of it’s and buts, and we like to know where we’re going and what we’re doing.
She will get 100 percent of the profit of course but that’s only cos we’ve banked rolled it at our cost. And don’t want any money back. If we did then She is where she is now in terms of profit.
So it seems kind of pointless to delay the inevitable selling of it and any profit would be because we’ve paid towards the upkeep of it.
Given the direction the property market is heading at present, if it were my daughter I would say sell up now, rent for a bit, try and save some money and hope to pick up a bargain in a year or two.
Of course it depends where her house is, but it will prob be worth no more by the time the mortgage ends than it is now, and quite possibly less.
Of course it depends where her house is, but it will prob be worth no more by the time the mortgage ends than it is now, and quite possibly less.
Frik said:
A colleague in a similar position took on his daughter's ex-partners portion of the mortgage and hadn't realised he had to pay stamp duty as it was effectively a second home for him.
There would always be stamp duty liable on the half of the property transferred from the BF to the daughter, (i.e. 50% of its market value), but in this instance that would be below the £250k first tier, so the amount payable would be £0But yes if your colleague actually took on owning half the house, then yes it would be a 2nd home for him and there is no lower zero rated tier for 2nd homes.
In this case however we are suggesting the OP may need to be a guarantor - that means his name wouldnt be on the deed or the mortgage directly as an owner, and thus would not attract stamp duty either.
Edited by AdamV12V on Sunday 9th April 10:38
Just been looking at it
If we help her then over five years we’d be 60 grand down we’re not rich and only own ours cos we’ve saved and saved nobody helped us we’ve just never been into cars and Dubai hols
If the market gos up 5 percent she’ll make 14
Grand at the expense of us loosing sixty
In the short term we haven’t got thst mind money to miss
So I’ve told her to get on her toes and sell it
She’s even bought most of the stuff in there I’m any case.
Bloke wants to just get drunk and play Xbox.
Works hard but it’s at the expense of his relationship
Best to cut ties lick your wounds and go again
If we help her then over five years we’d be 60 grand down we’re not rich and only own ours cos we’ve saved and saved nobody helped us we’ve just never been into cars and Dubai hols
If the market gos up 5 percent she’ll make 14
Grand at the expense of us loosing sixty
In the short term we haven’t got thst mind money to miss
So I’ve told her to get on her toes and sell it
She’s even bought most of the stuff in there I’m any case.
Bloke wants to just get drunk and play Xbox.
Works hard but it’s at the expense of his relationship
Best to cut ties lick your wounds and go again
There are a few things to consider.
Firstly where do you think the value of the house is heading in the short term?
Is the daughter committed to a career which makes it a good thing to have a home there, or is it a tie which might restrict her career?
How much is the mortgage relative to rent?
Costs of selling and buying are significant.
Renting isn't always great either.
Today might look like a good time to jump off the home ownership bandwagon.
But you haven't won at that game until you've managed to jump back on at a better time.
None of us can reliably predict the future and and none of us know the circumstances well enough to advise.
I will say it depends on where you draw the finish line. A course of action may seem poor or painful after two years, but come good in 5.
Or vice versa.
No good having a great plan to do well 10 years on, if you can't survive the first 18 months.
I knew people going through this at the end of the 80s, what was right for one wasn't right for others.
I'm inclined to suggest career is the most important consideration in the long run.
Firstly where do you think the value of the house is heading in the short term?
Is the daughter committed to a career which makes it a good thing to have a home there, or is it a tie which might restrict her career?
How much is the mortgage relative to rent?
Costs of selling and buying are significant.
Renting isn't always great either.
Today might look like a good time to jump off the home ownership bandwagon.
But you haven't won at that game until you've managed to jump back on at a better time.
None of us can reliably predict the future and and none of us know the circumstances well enough to advise.
I will say it depends on where you draw the finish line. A course of action may seem poor or painful after two years, but come good in 5.
Or vice versa.
No good having a great plan to do well 10 years on, if you can't survive the first 18 months.
I knew people going through this at the end of the 80s, what was right for one wasn't right for others.
I'm inclined to suggest career is the most important consideration in the long run.
Hi she’s a new job
Only had it a few weeks and likes it but who knows. She would need double her Salary to
Be comfy
But wouldn’t we all
Renting it out would cover mortgage just about. But not make any profit and no slush fund
I’m no expert but seems to be thryll dip abit more. And go up over five years but not as much.
So perhaps moss the time and his parents
Have realised thst and didn’t think we would.
So she could well be left with a nice house worth less than what it is now skinning
The both of us alive for a few years.
And then what sell it to make an extra 15k down the line or someone else moves in gos on mortgage.
It just gets so messy and then that’s without any economic things like covid etc.
like I said earlier it’s down ifs and buts
Really isn’t it. And factor in the potential to make A few quid than in a dicey market. The odds will be low.
Plus that dirtbag gets away with no headaches of selling it
Only had it a few weeks and likes it but who knows. She would need double her Salary to
Be comfy
But wouldn’t we all
Renting it out would cover mortgage just about. But not make any profit and no slush fund
I’m no expert but seems to be thryll dip abit more. And go up over five years but not as much.
So perhaps moss the time and his parents
Have realised thst and didn’t think we would.
So she could well be left with a nice house worth less than what it is now skinning
The both of us alive for a few years.
And then what sell it to make an extra 15k down the line or someone else moves in gos on mortgage.
It just gets so messy and then that’s without any economic things like covid etc.
like I said earlier it’s down ifs and buts
Really isn’t it. And factor in the potential to make A few quid than in a dicey market. The odds will be low.
Plus that dirtbag gets away with no headaches of selling it
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