When a relationship ends it can, of course, be hard to deal with on a personal level, but it can also mean a lot of admin work too.
You’ll have to work out who gets to keep shared belongings, cancel or split up any joint accounts and – if you’re a homeowner – discuss who’s going to pay the mortgage.
If your partner’s moving out of the house and you’ll be staying in it, you’ll probably take over the paying of the mortgage. However, it’s likely that your ex will want their share of the home’s value and you’ll want to make sure you independently own it, so they don’t have any legal claim further down the line. Let’s look at whether this is possible.
Sorting out details
It’s possible that you’ll be able to take on your mortgage alone – however, there’s no guarantee that your lender will agree to this. This is because mortgage lenders have to carry out comprehensive affordability checks to ensure you’ll be able to afford the mortgage payments. If they think you won’t be able to afford to make the full payment on your income, they may turn you down.
To afford to buy out your ex’s share of the home, you’ll probably have to take out a larger mortgage unless you’ve got enough in savings to cover this. Your lender may not approve this if they think a bigger mortgage will be unaffordable for you, so make sure you’re going to be able to afford the payments before applying. If you’ll be getting any maintenance or child support payments from your ex-partner, make sure to include these in your income when your lender is carrying out its affordability checks.
Getting a remortgage
To make sure you’re the sole owner of your home you’ll need to go about removing your ex-partner’s name from the mortgage and deeds. This is known as a Transfer of Equity and it means that the property will be entirely in your name. It also means that you’ll pay them an agreed sum, which could be half of the equity currently in your home. You’ll need a solicitor to help you with the process.
This means that you’ll have to get a valuation, to see how much the lender thinks your property is now worth. The valuation fee and any other costs are usually included in the remortgage but check with your lender to make sure that this applies in your case.
Your first step when you’re looking to remortgage should be your current lender, as they may offer specific mortgage rates for existing customers. However, if they don’t have a deal that’s right for you, it might be worth speaking to a mortgage broker like Ocean. They will be able to offer you advice about remortgaging to buy out your ex-partner.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.