Girlfriend and I broke up , Now what about the house?

[Brandon Staines]

Hi everyone. Yes, the title sums it all up, My girlfriend and I both own a house. She is currently living in it while I moved out, I am not paying the mortgage any since I am no longer living there but she wanted me to stay on the mortgage because our interest rate is 2.7%. What are my options? Is there any good way out of this? Any advise would be greatly appreciated!

[Jonathan Greene]

I'm sorry to hear about the breakup. It happens. If you own the house together, the only options are for one party to buy out the other or sell the house. Anything else would keep you tethered together after the breakup until the house was disposed of.

[Chris Seveney]

@Brandon Staines

Option 1: do nothing you stay on mortgage and good is you still own 50% of house but bad is if she defaults then it hurts your credit too

Option 2: have her buy you out but that would require a new mortgage at a much higher rate

Not much else you can do.

[Max Ferguson]

Tough situation man. But yeah, essentially what others have said above. One party can buy the other out, refi, or sell. 

Is the 2.7% an FHA by chance? My only possible out would be to offer the home as an fha assumable loan, that would help sell it.

Could also rent it out, controlled by an agreed upon third party that distributes equal pay to each party, and hopefully could also pay the mortgage out of rental proceeds so neither of you are on the hook. There is a ton of liability still with that option. 

Let us know what you figure out, sorry to hear :(

[Theresa Harris]

If you stay on the mortgage, you need to write out a legal agreement as to what happens when she sells (or if she finds another boyfriend/gets married).  You have money invested in it through the down payment plus mortgage payments.

Talk to a lawyer.  If she won't buy you out, then how does she think the assets should be divided when the house does sell?  Best option is to either sell the house or have her buy you out at today's market value PLUS return the money you've already invested (ie down payment, paying down the mortgage principal).

[Mike Dymski]

Sell.  Neither one of you are going to want to have to explain to your future spouses or significant others that you still own a house with your exes (and deal with that drama).

[Steve K.]

Sell and start fresh. 

There are too many ways that owning a house with an ex can get messy. For example she starts dating a carpenter or a handyman type (or even worse a wannabe carpenter or handyman) who moves in and does work on the home and claims they should have equity too for making those improvements. Or she starts dating a guy with a dog-sitting or weed growing or meth cooking business who does damage to the house. Or the market goes crazy and the property value goes way up but she says she gets all the gained equity because she's been paying the whole mortgage all this time and she's dating a lawyer now who is on her side... Or the market tanks and the value of the house goes down and that creates issues (selling at a loss, who brings money to the closing table, etc. I've actually seen this happen and it's ugly). Or she loses her job and can't pay the mortgage and she's dating a loser junky now and they expect you to pay the mortgage... Or she stops paying either on purpose or by accident and doesn't tell you and that wrecks your credit... Or it goes to foreclosure... Or she just cuts you out of the deal somehow and doesn't give you a penny and she's dating a mixed martial artist bouncer now so what are you gonna do, etc. There are too many ways for it to go sideways and only one way for it to work (you stay on good terms with your ex and everything goes perfectly with the house, you split the proceeds fairly when you sell). But you're dealing with an ex and that's not usually easy or fun. To Mike's point, it can also harm your ability to move on with a new partner who probably will not be thrilled to learn that you're still financially involved with your ex... 

Ideally you have a contract in place that spells out what happens if you split up or one of you dies? If not then Judge Judy would have a field day with this teachable moment.

I'd sell or let her buy you out at fair market value as determined by an appraisal if she wants to keep it. She'd probably have to get a new loan in that scenario however obviously in order to get you off the current loan unless the loan is assumable, but that's the downside of linking your finances on a 30 year contract without being married. Good luck!  

[Brandon Staines]

@Jonathan Greene @Chris Seveney @Max Ferguson @Theresa Harris @Mike 

@Mike Dymski @Steve K. Thank you all so much for your advice, I am truly grateful for all this helpful guidance. This is a great community to be a part of, You all rock!