How do I buy out of a Joint Mortgage

aggie25

Hi,
I hope this is the right place to post this but I have a question! I'm in a joint mortgage and I want to buy the other person out as far as I know the house is not in negative equity at the moment but am going to get a valuation on it.

My question is how do I buy the other person out of the mortgage? do I re mortgage? how does re mortgage work in the present climate will I only get 90-92% of it?

Any advise would be greatly appreciated!

am i bovvered

aggie25 wrote: »

will I only get 90-92% of it?

There are better qualified people than me to answer this but you will be lucky to get a loan to ratio value 90-92% the bank will want more like 80-85% and that is assuming you have a decent wage and secure job.

homer911

You will probably need to pay off the current mortgage and take out a new one. Get legal advice, there will probably be stamp duty implications as well

stepbar

The first question you would need to be asking yourself is "Can I afford to realistically repay the mortgage on my own?"

If yes to this then multiply your gross wage x 5 and if this allows you to buy out the mortgage then you could be able to get the mortgage you need.

dotsman

am i bovvered wrote: »

There are better qualified people than me to answer this but you will be lucky to get a loan to ratio value 90-92% the bank will want more like 80-85% and that is assuming you have a decent wage and secure job.

AIB offer up to 92%. BOI offer up to 90%.

You don't mention the other person's position. Do they want to be bought out?

If so (and you satisfy the bank's lending criteria on you own), you will need a solicitor as the title of the deed is to be put in your name only. Likewise, the bank will need to reissue the home loan in your name only. You will also need to pay off the other person's share.

ie if the LTV is 86%, you will need to offer the other person 7% of the value in cash. Obviously, to pay this you will need to raise 93% (86% + 7%). You can borrow up to your lender's maximum (or switch to AIB/BOI, who seem to offer the highest LTV), and have the remainder available in cash.

If the other person doesn't not wish to be bought out, then you can have problems. Are they a friend/relative/ex partner? If you are on good terms, then it is important to keep it that way. You both entered this commitment together, and it is you who is going back on that commitment, so they are under no legal or moral obligation to give into you. Ultimately, as well as offering them their fair share, you may need to exceed it to compensate for you backing out (not a legal requirement, merely as an incentive).

To be honest, until you know more (and you know more regarding the current valuation). Also, on the note of that valuation, due to the strange times we are currently in, that valuation could be easily disputed (either too optimistic/pessimistic). To be fair to both you and the other person, you may, for example, decide to get 3 different valuations and agree to settle on the average etc.

am i bovvered

am i bovvered wrote: »

There are better qualified people than me to answer

Thanks dotman, you live and learn. I thought the bank would be less reluctant to lend to a single person and therefore a single income these days and would need a greater LTV.

RebelRebel

I would say contact your solicitor firstly. I did this before and essentially We agreed a value on the house at which I was going to purchase it at. Then you need to get a mortgage agreement with a bank. The solicitor will work out the details with regards to to the seller receiving their half of the sale amount etc etc.

With regards to stamp duty, if you were a first time buyer when you bought half this house and have not bought anoter property since then you will not be subject to stamp duty as you are only increasing your interest in the property to 100%. Again your solicitor will advise you on this.

dotsman

am i bovvered wrote: »

Thanks dotman, you live and learn. I thought the bank would be less reluctant to lend to a single person and therefore a single income these days and would need a greater LTV.

No, most/all banks merely grant the loan based on the total repayment capability of the borrower(s). In fact a single person earning 100K per annum will get approved for more than 2 people earning 50K (as there is more of the single person's 100K to go towards debt repayment)

DanDublin1982

Currently thinking about starting this process myself. Can anyone advise of anything has changed in the intervening 6 years? Particularly around the stamp duty.

Thanks.

Trish56

You should firstly find out what is the current value of the property and then approach your current lender and advise them that you wish to transfer both the property and the mortgage into your single name. The request will be considered subject to the following:

• Current value versus mortgage outstanding - are you in negative equity.
• That you qualify for the outstanding mortgage in your name only.
• Has the mortgage been conducted in a satisfactory manner as in no arrears or late payments.
• If the bank are agreeable then you can employ a Solicitor.

I am assuming that both parties are agreeable to the transfer of the property and mortgage into one name only