Are you faced with the daunting prospect of buying someone out of a property? Especially during a divorce or separation, this can be a tricky time and the process can seem extremely complicated at first. Let’s break down buying someone out into some simple steps:
What does it mean?
Buying someone out means you are giving them their share of your property’s equity. Once you have done this, you will be able to remove them from the mortgage. If you are joint owners, the equity in your home will typically be split between you equally unless you have a legal agreement in place that says otherwise.
Transfer of equity
This involves the legal transition to sole ownership. Approval from your mortgage lender is essential. You should use a professional transfer of equity solicitor, such as https://www.parachutelaw.co.uk/transfer-of-equity-solicitor.
Financial considerations
Your options might include applying for a bigger mortgage, requesting a further advance, or re-mortgaging.
Proving affordability
Whether you are staying with the same lender or switching to a new one, you will have to pass credit checks and your lender will assess the affordability of making the mortgage payments on your own.
Let’s look at some affordability-boosting options:
Income boost remortgage
Integrating a family member’s income can boost your affordability.
Second charge mortgage
For those facing rejection, exploring second-charge mortgages with a mortgage broker is an option.
Family assistance
Family members can contribute through gifts, springboard mortgages, or later-life mortgages.
Timeline and challenges
A smooth process typically takes four to six weeks; however, disputes or financial challenges could extend this.
Legal and financial fees
Legal fees for the transfer of equity range from £250 to £500. Additional fees include HM Land Registry processing fees and broker and lender fees if applicable.
