Splitting a house when separating

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Splitting up with a long-term partner can be a messy and painful process - made even more complicated if you own a home together.

If you find yourself in the situation of separating or divorcing then this guide will help you work through the options available when splitting one of your biggest assets - your property.

Selling the property

The most obvious solution - and the one that gives you both the cleanest break - is to sell the house and split the profit from the sale between you once any mortgage and other debts have been paid off. Selling a home can take a long time though. In the meantime you and your ex-partner will need to either stay living in the property together, or one of will have to move out. If renting this can end up becoming expensive and eat into the profits from the sale.

What to do if you can’t sell due to negative equity

If you owe more on a mortgage than the property is worth then you are in what is known as ‘negative equity’. If you and your ex-partner can’t afford to pay off the difference that you owe once the property is sold then things can become difficult. But, there are a few things you could do:

You could rent the property out

If you can rent your property out for the same amount, or more, than the mortgage repayments, then you can reduce the amount of negative equity in the property until you are in a financial position to be able to sell it.

Continue living together

This option is not for the majority of couples who are separating, but if you are able to live harmoniously together then it will allow you to both have a roof over your heads while you continue to pay off the mortgage. Some mortgage lenders allow you to sell your property and then pay off the difference over time. You and your ex-partner would be equally responsible for paying this.

One party buys the other out

One of you may decide that you want to buy the other out of the property. Couples who share children often decide to do this to minimise disruption to them as much as possible. If you are going to sell your share of the home to your ex it is important that your name is removed from the deeds and mortgage. Otherwise, you will be liable if your ex-partner misses mortgage payments. It can also affect your chances of getting another mortgage unless you have a fairly substantial income.

Renting the property out

If neither of you need money to be released from the property then you may want to rent the property out to keep paying off the mortgage or gain an income from the property. However, be aware that things can become difficult if one of you suddenly decides that you want to sell and the other doesn’t and can’t afford to buy their ex out.

Can’t wait to sell the property?

If you are in a hurry to sell the property and make a completely clean break then you could consider using the services of a ‘quick house sale’ company. These companies buy properties quickly using their own cash funds. They often pay slightly below market value but offer a guaranteed sale which can sometimes happen in just days. Want to find out more? Contact Reader’s Digest Property to get a cash offer for your home. Call on 0800 4337979 or fill out the form below.