Buying friend out of house with my wife

[RadDad1]

I own a house with a mortgage with my friend. I now live in the house with my wife and we want to buy him out, and have the house in both our names. My friend wants to buy his own house so wants off the mortgage. Does anyone have any advice on how this would work? The house is worth about 70k and we owe 35k on the mortgage. Just hoping someone has knowledge of this. Any help would be appreciated.

You’ll need to speak to your lender and solicitor. Title deeds will need to be changed to you and your wife and you’ll need to be able to get sufficient mortgage in your names.

Did you agree with your friend who owned what percentage? Have they still been paying half mortgage even though not living there?

We have agreed to split the equity 50/50. So I would need to raise about 20k to buy him out. I understand this 20k can be added to the mortgage.

Ok so you need first to check the situation with current mortgage in the names of you and friend, are there any early repayment charges and if so how much and how long until they are up?

Assuming no early repayment issues, you need to check the valuation of the house and agree with your friend what you are going to do, are you both happy to go with £70k - I'd advise at least getting some estate agents in to value it to make sure this is accurate.

Then you and wife need an appointment with a mortgage broker or do some online calculators to check you can borrow £55k (at 70k valuation this would be a 78% LTV so OK although at the high end) on your joint income. I would expect you will need a whole new mortgage, I don't think you can simply add a new person, remove a previous mortagee +£20k borrowing onto your existing one (although I suppose worth checking with your current provider as might save hassle) - hopefully you can take the opportunity to get a better deal although bear in mind you may have to pay a new valuation+admin/application fee so budget for this...

You'll need a solicitor to deal with the change of title and handle the money moving around etc. Your friend may well have to pay CGT on the £20k so bear that in mind...