Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
Quickfire Roundup:
Let’s face it dealing with family members or breaking up with someone is is never easy but the good news is that buying someone out of a house is more common than you may think.
More good news – this can be a relatively simple process if there are aren’t disagreements about ownership.Â
With the right advice, you can take over a mortgage with the same lender and become solely responsible for the payments.
If everything is amicable, the transfer of equity can take place in as little as 4 to 6 weeks.
If you’re looking at how to buy someone out of a house, you’ll find that this process doesn’t have to be complex.
Whether you’re looking to buy your ex partner out or take control from a family member, there are simple steps to follow to achieve your goal.
Where agreements can’t be reached, there is potentially the option to sell the property. However, by following the tips below, you’ll be in a better place to achieve a mortgage buyout and stay in your current home.Â
By knowing how to agree on how much equity there is, and how to show that you can maintain the monthly mortgage payments, you’ll find your current lender may well be able to help.
Table of Contents
How to buy someone out of a house - get the right advice from the start
The first step you need to take to buy your partner out of a house is to understand everyone’s rights. If you’re currently co-owners, you need to have a full understanding of what that means.Â
Yes, you’re probably going to need mortgage advice, but independent legal advice and/or consulting with a financial advisor is a must to get to grips with the legal aspects.
When there is no specific divorce settlement, you’ll be advised that there is a 50/50 split of any equity in the property.
To complete a mortgage buyout, you’ll need to take over your ex partner’s share of the equity. We’ll look at how to fund this a little later.
The process that you’ll need to follow is known as a transfer of equity. If you’re planning on staying with the same lender, you’ll need a letter of consent from them to show that they agree.Â
Before they agree, they’ll need to be sure that you can afford the mortgage repayments on your own. If this is agreed upon by the lender, and if you’ve agreed with your co-owner/ex-partner, then the process can go ahead.Â
Once complete, the property’s title deeds are updated showing you as the sole owner, with your ex partner, friend or family member having their name removed.
It’s important to know that, with joint ownership and the end of a relationship, there isn’t always the need for an instant mortgage buyout.Â
With a mesher or martin order, it’s possible for people to remain, joint owners, until there is a specific trigger event. This could be linked to the age of any children, or if one partner remarries.
Boon Brokers are one of the UKs leading online mortgage brokers. They have a 5-star excellent Trustpilot rating with over 543 reviews.
- No mortgage fees
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Obtain a property valuation and agree on the equity
If you have a joint mortgage, and if you’re looking to buy out your ex, as property owners you both need to agree on the value of the property.Â
There are a couple of approaches to consider here to find out how much the house is worth, and how much equity there is:
Consult estate agents
One approach to getting the property valued is to approach an estate agent. They will be able to give you an idea of what the house may be worth based on current market conditions.Â
However, the issue here is that estate agents will not always be 100% accurate and you can’t have complete confidence in the valuation. Remember, they want you to sign up and sell the property, but that isn’t your goal right now.
Use a professional surveyor to establish property value
Perhaps the best approach to valuing your property, and one that your mortgage lender will approve of, is to pay for a formal valuation.
By using the services of a surveyor, you’ll be given a much more accurate insight into what the property is worth, and you’ll then be able to work out your share of the equity.
Understanding your share of the property and equity
While you need to split the proceeds of the house, you need to be sure just how much each party is entitled to.
This will depend on any divorce settlement and whether you’re tenants in common or joint tenants:
Tenants in common
If you’re tenants in common, this means that each person on the mortgage has a share of the house. Each person’s share isn’t necessarily equal.
It could be that one party owns 80%, while the other person’s share is only 20%. Should one party die, their share can be passed to anyone of their choosing.
Joint tenants
If you have a joint mortgage of this nature, then you both have equal rights over the property as a whole. If one person dies, the other has something known as the ‘right of survivorship’ meaning that full ownership goes to the other party.
How to finance the transfer of equity
Unless you have a lump sum of cash laying around, you’ll need a way to fund the mortgage buyout. The options open to you include:
- Applying to borrow more money with your current lender
- Approach a new lender for a new mortgage
- Consider a secured loan
Mortgage deal with your current lender
If your existing mortgage has expired, you can ask your mortgage lender to grant you a higher mortgage. If you find yourself tied into a deal, you could ask your lender for a further advance.Â
Both scenarios would involve affordability checks to ensure that you’re able to take sole responsibility for their new mortgage payments. With a further advance, most lenders won’t expect you to pay early repayment charges.
Seek a new loan with a new lender
If you want a new mortgage with a new lender, you should seek the advice of a mortgage broker.
Certainly, a specialist mortgage broker will be able to advise you on the best lenders to approach and where you’re likely to be accepted.Â
Of course, with a new application, you’re going to need to prove that you can meet the monthly repayments. Being 100% upfront with your mortgage broker will mean that you’re far more likely to have your mortgage approved.
With a new mortgage, you’d need to ensure that borrow enough to clear your remaining mortgage as well as being having enough to purchase the other party’s equity.
Secured loan
A secured loan is like a second mortgage in that it’s secured against the property. It’s a good idea to use mortgage experts when applying for this type of loan so that you understand the full implications.Â
You don’t always have to borrow from your mortgage provider, and finding the right lender can help to keep monthly repayments down.
Boon Brokers are one of the UKs leading online mortgage brokers. They have a 5-star excellent Trustpilot rating with over 543 reviews.
- No mortgage fees
- Whole of market access
- Free online consultations
- Directly authorised by the FCA
- No in person meet ups
Finalising your buyout
The transfer of equity and the legal process that goes with it needs to be fully completed before the house is 100% yours.
A mortgage broker will have helped you find the right product, but to finalise the process you also need a legal representative.
A solicitor’s role will be to update the title deeds and ensure that the Land Registry contains the right details.
Mortgage buyouts and fees
There are several fees to pay when looking to buy out a joint owner. These include:
- Legal fees to transfer equity – £250 – £500
- Land Registry fees – £50 plus
- Potential mortgage broker fees – variable
Final thoughts on how to buy someone out of a house
To buy someone’s share of a property, you need to be clear when it comes to the outstanding mortgage balance, the amount of equity and the legalities around your share of the mortgage.
If you’re looking to borrow more money so that you can be the sole owner, you need to ensure that your annual income is sufficient and that you can show your ability to meet the monthly repayments on your own.Â
With the right advisers on board, taking over someone else’s share of the property can be a smooth process.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
