"buying out" on a mortgage

[minniegrace]

If I want to take on the mortage for my house, how do I work out how to buy out the other person on the mortgage? Do I pay half of the amount the house has gone up by and half of the deposit and then transfer the mortage to my name? Or do I need to get a new mortgage in my name. My house has gone up by �110,000 and it will be hard for me to raise half of this, but I don't want to lose the house. Any advice anyone can give me?

[sft42]

I have been in a similar situation myself in the past...the best thing is if it can all be kept as civilised as possible and lawyers are kept out of the equation as this will save you a fair bit of money.

Basically the solution we came to was to get the house valued by three estate agents then took the average value of those quotes, subtracted the original purchase price and then decided on 50% of that amount to be given to that party leaving the house after fees from transferring names etc on deeds and mortgage had been taken care of.....that seemed amicable to us.

So basically you'd have to raise a loan or new mortgage for �55,000....good luck.

[Gef]

sft have I misunderstood your answer? As I see it I would be given �30000 to walk away leaving my partner with a property worth �160000 (original price �100000) and a mortgage of considerably less than that.

[sft42]

Yes and No Gef....I was assuming that you would be starting off with an original mortgage for the purchase price of the house....had any deposit been paid to lessen the mortgage would have to be taken into account of course, but as the partner remaining in the house would be taking over the full payment of the existing mortgage they have a greater financial burden....as I say that was what worked in my situation and was amicable but might not suit everyone.

[minniegrace]

Thank you sft, my situation sound pretty much like yours - it is reassuring to know yours all worked out. Thanks again.

[Gef]

Many thanks sft. I think my situation is totally different in that most of the mortgage will be paid off in a few years when policies mature. I suppose I will need to leave that to the lawyers even though it will cost. Cheers.

[Hammer]

A fair value for the house appears to be

(current market value) - (amount outstanding on mortgage)

Therefore you should probably pay half of this to buy someone out.