BUYING PARTNER OUT OF A  JOINT MORTGAGE | February 2024
‍buying partner out of joint mortgage

February 2024

Buying Partner Out Of Joint Mortgage in February 2024

If you are looking to buy a partner out of a joint mortgage, there are a few things you need to consider.

First and foremost, you will need to contact your mortgage advisor and inquire about the process of buying someone out of a house. They may require that you provide proof of income, assets, and employment. Once you have gathered all of the necessary documentation, you will need to submit an offer to purchase form along with your down payment.

The lender will then review your application and make a decision. If approved, you will be required to sign a new agreement with the lender. You are now the sole owner of your home and solely responsible for paying the mortgage.

But if that seems deceptively simple, below are some mortgage buyout solutions and things you might need to know before you determine whether to buy a partner out of a joint mortgage.

Topics that you will find covered on this page

You can listen to an audio recording of this page below.

What is a joint mortgage?

A joint mortgage is when two or more people take out a mortgage together. When you take out a joint mortgage, you become financially linked: the mortgage is in both your names rather than one partner’s name and is secured by the property that you purchase, which becomes a joint asset of which you are a co owner.

Couples may wish to take out joint mortgage terms to purchase a property such as a family home.

Both parties are jointly and severally liable throughout the mortgage term. This means that if there are any missed payments by one person, the other person is still legally obliged to pay the entire amount of the mortgage.

Even if you don’t have a joint mortgage, you may have a beneficial interest in a shared home because of a financial contribution you have made. Seek mortgage advice if you think this might be the case.

Why might you take out a joint mortgage?

There are a few benefits to taking out a joint mortgage:

  • You may be able to qualify for a larger loan than you would have if you applied for the mortgage on your own.
  • Both parties are responsible for making monthly payments, which may help to make the mortgage more affordable.
  • If one party wants to sell the property, they will need the permission of the other party. This can provide some stability and security, knowing that your home is not going to be sold out from under you.

What are the options for a joint mortgage during a separation?

During a separation, the breakdown of a civil partnership, or a divorce settlement, in general, people finds themselves unable to pay off the mortgage. There are a number of other options for your current mortgage.

Getting out of a joint mortgage in the appropriate way is critical. This is due to the fact that your credit files are linked as long as you and a partner share a mortgage or any other financial agreement.

1 – Take out a Mesher or Martin order

If you and your partner cannot agree on who will stay in the house, you’ll need to get a Mesher Order or Martin Order. 

This is a judicial order that determines how the property will be split. Before taking out a Mesher or Martin Order, it’s vital to consult a legal adviser for independent legal advice. This is a complicated procedure, and it should not be done lightly.

A Mesher Order is a type of family court order under which one partner may stay in the property until a certain “trigger event” happens; the youngest child completes secondary education; your partner chooses to remarry or cohabit with a new partner; or by a specific date, as agreed by both partners.

If you get a Martin Order, both parties’ names remain on the mortgage and title deeds, although one party may move out of the property. 

2 – Continue to share the mortgage at a reduced percentage

If you and your partner decide that you will continue sharing the mortgage (perhaps if the property is a family home), you will need to renegotiate the terms of your mortgage with the lender. 

This includes reducing the percentage that each party is responsible for. For example, if you currently have a 50/50 split, you may want to change it to a 60/40 division in favour of the person who is staying in the home.

‍buying out a partner

3 – Sell the property

If you and your partner choose to sell the property, you will need to repay the mortgage in full. When the mortgage is paid, you then will split the proceeds from the sale evenly.

If you find yourself in a situation where you have negative equity (your house is worth less than it was when you took out the loan), you’ll have to pay off what you can and split the outstanding debt between you.

4 – Keep the property and let your partner live there

It is possible to keep the home and let your partner live there, but you will need to seek approval from your lender first. This is because you will be responsible for making all of the monthly repayments.

Your partner may also be required to sign a “quitclaim deed”, which states that they give up any ownership rights to the property.

"A joint mortgage is when two or more people take out a mortgage together. When you take out a joint mortgage, you become financially linked: the mortgage is in both your names rather than one partner’s name and is secured by the property that you purchase, which becomes a joint asset of which you are a co owner."

5 – Keep the property and enact a mortgage buyout 

If you wish to keep the property, you will need to buy your partner out of their share of the property. This can be a complicated process, but it is possible. You will need to seek approval from your mortgage lender and have enough money for a down payment.

After you’ve gathered all of the necessary documents, submit an offer to purchase form and your down payment to secure a mortgage. The lender will then assess your application and make a decision. 

You will be required to sign a new mortgage agreement with the lender if you are accepted for financing – you may wish to have a new property valuation made at this time.

‍buying someone out of a house

What exactly is a mortgage buyout?

A mortgage buyout occurs when one partner buys out the other party’s interest in the property. This usually happens when one person wants to sell the property and the other doesn’t, or if the couple is getting divorced.

When you buy your partner out, their name is deleted from both the mortgage and the property’s title deeds.

How can I buy out my partner on a mortgage?

If you buy someone out of a joint mortgage, you will need to take ownership of their share of the property – this is called a ‘transfer of equity’ and will require mortgage approval from the lender. They will assess your application and make a decision. If you are approved for financing, you will be required to sign a new mortgage agreement.

When you buy your partner out, their name is deleted from both the mortgage and the property’s title deeds.

How can I buy out my partner on a mortgage?

If you buy someone out of a joint mortgage, you will need to take ownership of their share of the property – this is called a ‘transfer of equity’ and will require mortgage approval from the lender. They will assess your application and make a decision. If you are approved for financing, you will be required to sign a new mortgage agreement.

You will also need to have sufficient funds for a down payment. The down payment is typically 20% of the purchase price of the property.

How much does it cost to buy your partner out?

The cost of buying your partner out will depend on the current value of the property and how much outstanding debt is owed on the mortgage. 

You will need to find out how much these amount to and will also need to have sufficient funds for a down payment, which is typically 20% of the purchase price.

can't afford to buy out your partner

Can I transfer a mortgage if I’m self-employed?

If you are self-employed, you might be able to hand over the mortgage to a family member or friend. However, the lender will need additional information, such as tax returns and financial statements. You should contact a mortgage broker to see whether this is an option for you.

What are the tax implications of buying out a partner from a joint mortgage?

When you buy out your partner, you are usually required to pay stamp duty. However, if you are buying out your partner from a joint mortgage, you may be eligible for a concession. 

Stamp duty concessions are available in certain instances for people who are buying their home after a relationship breakdown. You will need to provide evidence of the break-up, such as a divorce certificate or separation agreement.

If you are buying a property with someone who is not your partner, you will not be eligible for the stamp duty concession.

What if we are joint tenants?

In the case that you and your partner are joint tenants, you will both have an equal share of the property. This means that if one of you is deceased, the other will inherit the property.

If you wish to sell your partner out, you must first get their permission. You’ll also need to convert the property to tenants in common ownership.

To do this, you will need to file a deed with your local land registry office. Once this is filed, you can proceed with buying your partner out.

‍buying someone out of a mortgage

What are the benefits of buying out my partner?

There are a few benefits of buying out your partner from a joint mortgage.

  • You will own the property entirely, with no restrictions on your use. This means that you can make all of the decisions about the property, such as whether or not to sell it or renovate it.
  • Secondly, you will no longer be liable for your ex-partner’s financial share of the mortgage if they stop making monthly mortgage payments. This means that you won’t have to worry about the mortgage lender coming after you for the money.
  • Last but not least, buying the house outright can help you secure a lower interest rate on your loan. This is due to the fact that you will no longer be considered a high-risk borrower.

What are the risks of buying out my partner?

There are a few risks to consider before buying out your partner.

  • First, if you keep the home, you will be responsible for the entire mortgage. This implies that if you can’t afford to pay the instalments, you might lose your house.
  • Second, the property’s value may decline after you acquire it. This would result in you owing more on your mortgage than the property is worth.
  • Finally, there might be unexpected repairs or maintenance that must be performed on the home. This may result in you having to spend more money than anticipated and could lead to unexpected financial difficulty.
‍buying ex partner out of the mortgage

How do I figure out how much my partner is owed?

If you want to buy your partner out of the mortgage, you will need to know how much they are owed. The amount they are owed is calculated by taking into account the principal balance of the mortgage, as well as any interest that has accrued.

You can use an online mortgage calculator to estimate your partner’s share of the property.

Your ex-partner may also be entitled to a portion of the equity in the property. Equity is the difference between the appraised value of the home and the amount still owed on the mortgage.

For example, if your home is worth £200,000 and you owe £150,000 on the mortgage, you have £50,000 in equity. If you were to sell, you would split the proceeds 50/50 with your partner.

You can use an online equity calculator to estimate the value of your home’s equity.

What happens if I can’t afford to buy my partner out?

If you cannot afford to buy out your partner, you may have to sell the property. This is typically done through a real estate agent.

Another alternative is to refinance your mortgage. Taking out a fresh loan to repay the existing mortgage is known as refinancing. You’d be the sole owner of the home after that.

Can I replace someone on my mortgage with someone else?

If you want to replace your ex-partner on the mortgage with someone else, this is called an ‘assumption of mortgage’. You will need to seek approval from your lender before doing this.

You may be required to pay a fee as well. In order for this to happen, the assumable mortgage must have a due-on-sale clause.

joint mortgage

Can I remortgage to buy my partner out?

If you want to take out a second mortgage to buy your ex-partner out, you will need to get approval from your lender. You may be required to pay a fee as well.

Sometimes, in order to remove your ex-partner’s name from the mortgage and title deed, you will be required to remortgage. Alternatively, this can be done via a product transfer.

The process of remortgaging can be complex and time-consuming. It is vital that you seek professional advice before proceeding and to ensure that you find the best mortgage deal for you, even if that means seeking a new broker. It is worth noting that any new lender would also conduct affordability checks.

Are there any other alternatives to buying someone out of a mortgage?

There are a few other alternatives to buying your partner out of the mortgage. One option is to take out a personal secured loan. This can be used to pay off your partner’s share of the mortgage.

Another alternative is to get a home equity loan. This is a loan that is secured by the equity in your home. The amount you can borrow will depend on the value of your home and how much equity you have.

You could also consider selling the property and splitting the proceeds with your partner. This may be the best option if you can’t afford to buy them out or if you can’t qualify for a loan.

A final option is to ask a relative to help with a guarantor mortgage, in which an appointed representative will make mortgage payments if you cannot. 

If you are looking for a guarantor to help with mortgage repayments, you can contact the same lender who organised the original loan. They may have a list of potential guarantors that they can recommend.

You may also inquire with family or friends if they would be willing to serve as a guarantor. Keep in mind that responsibility for mortgage repayments is a significant duty, and you should not undertake it lightly.

Ready to buy your partner out?

Before buying out your partner, it is important to consider all of your options. You will need to have a clear understanding of your financial situation and what you can afford. It is also important to get professional advice before proceeding.

First steps to take when buying a partner out from a mortgage

  1. Find out how much your ex-partner owes on the mortgage. This can be done by using an online mortgage calculator.
  2. Determine if your partner is entitled to any equity in the property. Equity is the difference between the appraised value of the home and the amount still owed on the mortgage. You can use an online equity calculator to estimate this.
  3. Once you have determined how much your partner owes on the mortgage and how much equity they are entitled to, you can begin negotiating a buy out price. It is important to have a clear understanding of your financial situation and what you can afford before proceeding.
  4. Once you have agreed on a price, you will need to get approval from your lender. You may be required to pay a fee as well.

 

The process of remortgaging can be complex and time-consuming. It is important to make sure you get the right advice from a mortgage advisor with a proven track record of completing mortgage transfers before proceeding.

Article author

Katy Davies

I am a keen reader and writer and have been helping to write and produce the legal content for the site since the launch.   I studied for a law degree at Manchester University and I use that theoretical experience, as well as my practical experience as a solicitor, to help produce legal content which I hope you find helpful.

Outside of work, I love the snow and am a keen snowboarder.  Most winters you will see me trying to get away for long weekends to the slopes in Switzerland or France.

Email – [email protected]

Frequently Asked Questions

What exactly is a mortgage buyout?

A mortgage buyout occurs when one partner buys out the other party’s interest in the property. This usually happens when one person wants to sell the property and the other doesn’t, or if the couple is getting divorced.

Can I transfer a mortgage if I’m self-employed?

If you are self-employed, you might be able to hand over the mortgage to a family member or friend. However, the lender will need additional information, such as tax returns and financial statements. You should contact a mortgage broker to see whether this is an option for you.

Can I replace someone on my mortgage with someone else?

If you want to replace your ex-partner on the mortgage with someone else, this is called an ‘assumption of mortgage’. You will need to seek approval from your lender before doing this. You may be required to pay a fee as well. In order for this to happen, the assumable mortgage must have a due-on-sale clause.

Ready to buy your partner out?

Before buying out your partner, it is important to consider all of your options. You will need to have a clear understanding of your financial situation and what you can afford. It is also important to get professional advice before proceeding.

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Disclaimer: Please be aware that this site is no longer under active management. As a result, we cannot assure the accuracy or relevance of the content provided. Visitors should use their discretion and consider the potential for outdated or inaccurate information before relying on any material found here.