Are you sharing a mortgage with a friend, family member, spouse, or partner, and one of you has decided to move out?
Buying someone out of a mortgage in the UK is not a complicated process regardless of your situation.
Below, we explain how to buy someone out of a house under different circumstances!
So what exactly is a mortgage buyout? The process of buying someone out of a house involves at least one owner of a property purchasing the equity share of the other owner(s).
By doing so, the co-owner(s) are released from the mortgage, and their name(s) are removed from any documents related to the property, including the title deeds.
Depending on your exact circumstances, the steps to buying out other owners might vary to a degree, but generally, they include the following:
When it comes to refinancing for buying out a jointly owned property, you have several options at your disposal: from getting a loan from a family member to remortgaging. Ultimately, your financial situation and the amount you need will determine how you raise money.
If you and your siblings have inherited property following the death of your parent, you can become the sole owner by buying their shares.
However, the details surrounding the purchase will vary based on your intentions. For instance, if the house is already mortgaged, you could take out a second mortgage to cover the transfer of equity and continue paying the original mortgage.
Then again, if you are not planning to live in the house, you could go for a buy-to-let mortgage that will allow you to buy out the other siblings and cover the mortgage repayments by renting out the property.
Deciding what happens to the home you shared with an ex-partner after a divorce or a partnership dissolution is a critical financial decision. If buying your ex-partner out of the mortgage is your preferred course of action, you should estimate your partner’s share.
Figuring out each owner’s share in a property is a fairly straightforward process:
Note: The financial settlement agreed upon during the divorce will also decide how the property’s equity shares are split between the partners.
One of your best options to buy out your partner’s property shares is applying for another or a different property mortgage, i.e. remortgaging. You can go about this in several ways:
Note: To determine the best course of action, consult with a mortgage broker who will assess your current circumstances and potentially save you a substantial sum in the long run.
Even if you change your mind about buying your partner out of a joint mortgage in the UK, or you cannot afford to do so, you can consider other profitable alternatives, such as:
Note: Under certain circumstances (most often when children are involved), you may be unable to sell the property until a particular time, if ordered so by the court.
If you wonder how to buy someone out of a house, note that you can take several approaches, as explained in the sections above. Ultimately, the best course of action is to get help from mortgage experts who will advise you on the most profitable course of action.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.