How do I buy someone out of mortgage?

[mortgagedilema]

£80k mortgage outstanding and about £200k equity in property.

Does that mean I need to remortgage for £180k and give £100k as half the equity to buy out?

I would then be left with £180k mortgage.

What am I asking for from a mortgage adviser to get the figures on this, is it a remortgage?

Thanks

If you’ve not got any early repayment charges and and you could get a better rate now that’s the route I’d take.
If you’re still locked into a product and have to pay early repayment charges or if you have a decent property I’d be asking how your ex’s name can be removed from the mortgage and then take an additional loan out with the same mortgage company for the rest.

No idea of the ins and outs.
I would expect real estate agents to get home valued.
Take the middle figure as to what home is worth.
Apply for loan taking into account any fees as well as paying ex for half the homes value.
If home worth $400,000 need to pay ex $200000.
Need specialist advice I think

thanks. So it would be two mortgages on the same property? The additional loan, would that be classed as a remortgage? The money would go onto my bank for me to pay the other person out of the property?

@Weenurse

No idea of the ins and outs. I would expect real estate agents to get home valued. Take the middle figure as to what home is worth. Apply for loan taking into account any fees as well as paying ex for half the homes value. If home worth $400,000 need to pay ex $200000. Need specialist advice I think

Half the entire value? I just thought it was half the equity in the property!

Can anyone clarify please??

Just half the equity.

I would have thought you split the equity
So £200k less £80k mortgage is £120k
Half of that is £60k
So you need to borrow £140k to pay off the old mortgage and give £60k to the other person.
It is a transfer of equity with a remortgage.

Also, bear in mind that if you were selling you would have estate agent costs etc - the person you are buying out will not have those and so I think the value should be lower to take that into account.

Yes that’s pretty much it .... you work out what you’d each get if you sold the house and paid of the mortgage. You then need to pay the other person off usually by increasing your mortgage borrowing to cover it.

When I did this we had the house valued by an estate agent so we agreed it’s worth, agreed between us what was due to my ex and then I found a mortgage broker really useful to help get the best mortgage deal. For me that did mean a remortgage with another provider as the existing mortgage company wouldn’t lend to me on my own

You will need to get a solicitor- ideally both of you will.
The person you are buying out will need to sign a TR1 (assuming England) so the property will be transferred to you. The solicitor acting for them gives an undertaking to hand it over once the £60k is received.

My bank had an in house mortgage advisor. There were no early repayment fees, it was just a transfer of ownership. It was actually quite easy, and the best thing I've ever done.

Do you have kids though? Do you have to give a full 50%

@spotcheck

My bank had an in house mortgage advisor. There were no early repayment fees, it was just a transfer of ownership. It was actually quite easy, and the best thing I've ever done.

Do you have kids though? Do you have to give a full 50%

Yes one young child.

Did you both use solicitor?

@mortgagedilema

thanks. So it would be two mortgages on the same property? The additional loan, would that be classed as a remortgage? The money would go onto my bank for me to pay the other person out of the property?

It’s not really 2 mortgages as they’ll need to be with the same company. All your doing is taking out additional money on a different product. It’s usual called an additional loan / further advance. Basically when it comes to the mortgage you need to look at any early repayment charges and your current interest rate first before deciding what to do.

If the house value is 280 and the equity is 200 the other person does not walk away with £140! If everything is split 50/50 the other person should walk away with half the equity and not half the house value

You need to think about what the position would be if the house was sold, which as I see it would be as follows:

House sold for £280k
Mortgage of £80k paid off
Remainder is £200k
Spilt proceeds 50/50, so £100k each

You need a broker and a solicitor to:

• Arrange a new mortgage for you at £180k

• Transfer property into your name
• Pay other party £100k

@Starseeking

You need to think about what the position would be if the house was sold, which as I see it would be as follows:

House sold for £280k
Mortgage of £80k paid off
Remainder is £200k
Spilt proceeds 50/50, so £100k each

You need a broker and a solicitor to:

• Arrange a new mortgage for you at £180k

• Transfer property into your name
• Pay other party £100k

Thanks for setting that out clearly and logically.

If you sold the house now for 280k and there is 80k left on the mortgage, you would each get 100k and pay off the mortgage. Minus fees etc.
If you buy the other person out you need to pay them the 100k they would have got.
My parents gave me the money when I got divorced, otherwise I would have had to add it to the mortgage.

It's technically a remortgage if you are staying in the same property, I believe. You can either approach your existing lender, or get a broker involved.

NB. Whoever is staying in the house with the DC should get more of the equity if they have to reduce work hours. I was stupid when I split with my EXDP and gave him half, while looking after DC and working!

I did this. Soon to be ex and I went to the remortgage appointment together after having got 3 estimates of resale value. We agreed to the average of these values, split in half. He got the big payout and my mortgage consolidated to account for this. I kept the property another 10 years and it continued appreciating. It was a tough decision to make at the time but turned out to be the wisest too.

You need to get a mortgage for £180k and pay the other party £100k.
Its a transfer of equity which a solicitor can do for you.

I had to do this many years ago when me and an ex split up, he didn't want any of the equity (it was only about 30k as we'd only been there 2 years when we split.) From memory, the sol writes to the other party confirming that they want to sign their share of the house over. Theres some forms to fill in (straightforward) then once you've got the mortgage in your own name the solicitor finalises everything.

Took about 3 months for me.

Good luck!

It depends if you're joint tenants or tenants in common; and if you're tenants in common what the split is. If 50/50 or joint tenants the above advice is correct.

If tenants in common but not on a 50/50 split you'll need to split the equity as per your agreed split.

We didn't use solicitors.
The bank had their own legal people draw up the necessary paperwork.
We agreed the amount my ex would get between us