Question

Jon,

My situation is as follows:

My partner and I are going our separate ways, but we have a few things we need to work out. We have a property together with a small mortgage with 5 years left to pay. The property is worth around £150,000, and the mortgage is £30,000. We mortgaged it to pay for some upgrades and modifications. My partner wants to stay in the house, and states they will pay the mortgage payment each month. We also have 2 credit cards with balances of £1,000 each. I have agreed to pay these. My questions are about the property, as it is in both our names. I feel I should be paid my portion of any equity in the value of the property. My partner states that they should receive a larger share of any equity as they will be continuing the payments. Any thoughts?

Terrance

Answer

Terrance,

Ending a relationship is difficult enough, let alone adding in the financial issues.

In the past my advice in deciding who gets what in a relationship ending or divorce, is to mutually decide who will pay what bill(s), and the split of any assets. Easier said than done.

One party may have paid the deposit, or paid more of the deposit, or paid more towards the property and mortgage payments.

In your set of circumstances, not knowing if one of you paid the deposit or who paid the mortgage or contributed more towards the property, taking the current value fo £150,000 subtracting the mortgage balance of £30,000, which your partner will pay, leaves £120,000, which in a 50/50 split would mean you receive £60,000.

However, both agreeing to this, and then raising the money to “buy you out” of the property, is where the real issues lie.

Your partner would need to raise £60,000, which means they may need to remortgage the property, increasing their mortgage payment.

There also is the issue of if you have children together? There may be child maintenance involved, which can change matters financially.

Trying to keep matters amicable, and the lines of communication open will help.

Regards,

Jon

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