Being "bought out" of mortgage

Welshie_2

Last year, I bought a house with my friend, she had a deposit, I didn't, and so we agreed on a percentage of ownership for when we sold the house. We went for interest-only 2yr fixed rate as it was a short-term plan for us both. She is now considering buying me out so that I can buy with my boyfriend. What I'd like advice on, if anyone can help, is the amount (if any) that she would have to pay me when our house is valued. We paid less than the house was on the market for (as is usually the case I guess), so when we value it now - do we then have to split the difference in value of the house now and value a year ago, or value of the house now and price we actually paid for it? Also, does it make a difference as we were only on interest-only? Very confusing! I'd appreciate any advice! Thanks

Pobby

Well I guess it depends on how much the property is valued now as compared to the price that you paid for it.So assumming it has gained some equity the calculation would be price now minus price paid for minus the deposit that your friend paid.Think for the sake of your friendship,it may be a good idea to get 2 or 3 valuations.

silvercar

you could agree to take 97% of the average of 3 valuations as the value for your purposes. Then take off the outstanding mortgage and divide the remainder in proportion to the agreed shares. DOn't forget to allow for the costs of removing your name of the deeds and the mortgage.